Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

BRITISH TRANSPORT DOCKS BILL

Order for Third Reading read.

To be read the Third time tomorrow.

BRITISH WATERWAYS BILL

Read the Third time and passed.

THURROCK DISTRICT COUNCIL BILL

As amended, considered; to be read the Third time.

BRITISH RAILWAYS BILL (By Order)

Order for consideration, as amended, read.

To be considered tomorrow.

BRITISH AIRPORTS AUTHORITY (LONGFORD RIVER) BILL [Lords]

Read a Second time and committed.

GREATER LONDON COUNCIL (MONEY) BILL

Order read for resuming adjourned debate on Question [20th May],
'That it be an Instruction to the Committee on the Bill to reduce the sums mentioned in Item 10 of Part I of the Schedule (Page 6) as follows: —

(a) in column 3, by leaving out "£142,601,000" and inserting "£87,601,000", and
(b) in column 4, by leaving out "£82,605,000" and insert "£55,605,000".'

Debate further adjourned till Wednesday 19th June at Seven o'clock.

Oral Answers to Questions — EMPLOYMENT

Employment Situation

Mr. Carter: asked the Secretary of State for Employment if he will make a statement on the current employment situation.

The Under-Secretary of State for Employment (Mr. John Fraser): The rise in unemployment which began during the period of 3-day-week working has been halted and there is a strong demand for labour in most industries.

Mr. Carter: I thank my hon. Friend for that reply. Will he confirm that the Government regard the present unemployment figures as too high and will continue to pursue and maintain a policy of full employment as a first priority?

Mr. Fraser: I accept that the figures are too high. My right hon. Friend the Chancellor of the Exchequer has made clear that, if necessary, he will introduce a second Budget to make any necessary adjustments to influence demand and to keep up the level of employment.

Mr. Nott: Is it the case that the Department of the Environment and other Government Departments are urging regional water authorities and other quasi local government bodies to place contracts with the construction industry as urgently as possible because of the serious position of that industry? If so, should not the Chancellor of the Exchequer make a statement about his policy in this public sector?

Mr. Fraser: Those are both questions for other Departments, one for the Department of the Environment and the other for the Treasury. It is true that the construction industry has not been so buoyant, but it is hoped that the recent Government loan to building societies will help to stimulate demand in the housing sector.

Redditch

Mr. Hal Miller: asked the Secretary of State for Employment what are the latest indications of job vacancies and unemployed in Redditch.

Mr. John Fraser: In May the Redditch employment office held 514 job vacancies and the careers office held 206. There were 407 people unemployed and registered at the two offices. The vacancy statistics relate only to vacancies notified to the employment and careers offices and do not measure the total unsatisfied demand for labour.

Mr. Miller: In view of the figures given by the Minister, for which I am grateful, does he agree that from the point of view of employment there is no great hurry to take a decision about attracting large-scale industry to Redditch, and that we should come to a decision on the future size of Redditch without reference to the need to attract employment?

Mr. Fraser: The hon. Gentleman probably has in mind the application which has been made for an industrial development certificate in the constituency which he represents. Matters of balance of employment between one part of the country and another are considered by the Department of Industry and I am sure that that Department will take those and other considerations into account.

Conciliation and Arbitration Service

Mr. Stanley: asked the Secretary of State for Employment when the conciliation and arbitration service will come into being.

The Secretary of State for Employment (Mr. Michael Foot): Consultations are now proceeding and I intend to establish the new service just as quickly as possible.

Mr. Stanley: In view of the valuable contribution which has been made by the Commission on Industrial Relations during the past five years, will the Secretary of State give to the House the two assurances which he gave upstairs this morning, namely, that the CIR will not be wound up until its functions can be assumed by the conciliation and arbitration service and, secondly, that the valuable in-depth research and investigation work into certain aspects of industrial relations which has been carried on by the commission will be carried on by the CAS?

Mr. Foot: I do not think it is proper for me to refer to proceedings which have

taken place in Committee. The proceedings will be reported to the House, when I have no doubt that those aspects can be dealt with. The undertakings I have given elsewhere certainly hold good in the House of Commons.

Mr. Radice: Does my right hon. Friend agree that the principle of the CAS has ready support from both sides of industry? Will he accept that the reason for that support is that people in industry, unlike some Conservative Members, understand the need for a genuinely independent body which can deal not only with conciliation and arbitration matters but also with the strategic functions now carried out by the CIR?

Mr. Foot: I agree with my hon. Friend. We are gratified at the response from both sides of industry to our proposals, and we hope that everybody will join in giving the new organisation a flying start.

TUC (Meetings)

Mr. Nigel Lawson: asked the Secretary of State for Employment when he next expects to have a meeting with the TUC.

Mr. Michael Foot: I keep in touch with the TUC all the time, but no formal meetings have been arranged for the immediate future.

Mr. Lawson: I am delighted to hear that the right hon. Gentleman keeps in touch. When he next meets the TUC will he explain why yesterday in Luxembourg his Department, on his instructions, vetoed a most important new EEC proposal to give workers special rights in the event of large-scale dismissal? Did he veto this matter because he did not have time to get Mr. Scanlon's authorisation first, or was he simply trying to make the Foreign Secretary's task of renegotiation more difficult?

Mr. Foot: The hon. Gentleman is not correct to say that a veto was applied. What we did was to exercise our right to put our point of view on the question which was before the Ministers. We explained that we were in consultation with the TUC on this among other subjects and that the proposals contained in our employment protection Bill go a great deal further than those discussed in Brussels. We did not apply a veto, but we


put our case clearly. It was well understood by the other members present.

Mr. Hayhoe: How does the right hon. Gentleman assess his chances of convincing the TUC of the Chancellor of the Exchequer's view that what happens to wages is the key to the control of inflation this year?

Mr. Foot: I do not think that the quotation which the hon. Gentleman purports to select from my right hon. Friend's speech gives a proper indication of what he actually said. We believe that the TUC and the Government will arrive at views which are compatible one with another in dealing with the situation. I hope that the hon. Gentleman and others will wait a little longer so that they will see what we have been preparing. I am sure that when that time arrives they will see how wise our preparations have been.

Foreign Defence Equipment Contracts

Mr. Tebbit: asked the Secretary of State for Employment what estimates he has made of the effects on employment of the blacking by AUEW members of defence equipment under construction and maintenance for foreign Governments.

Mr. John Fraser: I am not aware that any workers are likely to lose their jobs as a result of action by the AUEW.

Mr. Tebbit: Will the hon. Gentleman take an interest in the comments made by Air Vice-Marshal Menaul, Director-General of the Royal United Services Institute for Defence Studies, who estimates that if defence orders are turned aside the loss of employment could amount to 20,000 jobs and the loss of exports could involve £2,000 million over five years? Will he also bear in mind that, as events in Ireland have recently shown, it is not always the Left wing which takes the initiative and that he might be stoking up trouble for himself if he goes along with the present trend?

Mr. Fraser: The hon. Gentleman is getting a little excited about industrial action by 20 workers. Perhaps he will convey to the gallant gentleman whose name he mentioned that it is no part of my Department's policy to solve the unemployment problem by indiscriminate

sales of weapons and arms to racialists, Fascists and military dictatorships.

Mr. Skinner: Is my hon. Friend aware that I agree with the comment made by the hon. Member for Chingford (Mr. Tebbit) that it is not always the so-called Left wing that causes blackouts or the blackings into which the Leader of the Opposition, when Prime Minister, plunged the country only a few months ago? Can my hon. Friend say how many man days were lost as a result of that blacking?

Mr. Fraser: Not without notice, but it was a very high number.

Mr. Cormack: Will the hon. Gentleman say when a contract is not a contract?

Mr. Fraser: Not without notice.

Industrial Democracy

Mr. Rost: asked the Secretary ol State for Employment if, in his proposals for increased industrial democracy, he will provide for participation by management in the decision taking of trade unions.

The Minister of State, Department of Employment (Mr Albert Booth): I can
assure the hon. Member that where managers become members of appropriate trade unions they have the usual opportunities to participate in the decision taking of those trade unions.

Mr. Rost: May we assume that 50 per cent of the elected members of company managements and shareholders will be appointed by Government legislation to trade union executives, or is the Government's proposal for participation and industrial democracy merely a one-way process?

Mr. Booth: One of the prime functions of a trade union is to look after its members. It is right that those members alone should participate in the union's decision making. The operations of a company have to take account of the interests not only of management but of shareholders and workers. The responsibility in these cases should be shared, and we believe that in making provision for these matters in the industrial democracy Bill these mutual interests, even


where they conflict, will be properly represented.

Mr. Wigley: Does not the hon. Gentleman agree that one of the greatest hindrances to economic growth resides in the wasted energy of endless industrial strife and the fact that an increasing number of people in management and trade unions now recognise the need for profit sharing and participation in industrial democracy to get ourselves out of the present situation?

Mr. Booth: I very much appreciate the hon. Gentleman's comments. We believe that a successful extension of industrial democracy will avoid many of the disputes that now take place and will make for a more efficient operation of industry.

Mr. Whitelaw: Does the hon. Gentleman agree that if that process is to take place—and it is desirable that it should— it must mean that the trade unions should be seen to have rules which make them responsible to their companies and to the community as a whole?

Mr. Booth: Trade union rules are matters for the trade unions, just as the rules of employers' associations are matters for those bodies. I have no reason to believe that the existing rules of employers' associations and trade unions will be allowed to stand in the way of a proper extension of industrial democracy.

Defence Expenditure Reductions

Mr. Robin F. Cook: asked the Secretary of State for Employment what preparations are being made by his Department to counter the effect on employment of cuts in defence expenditure.

Mr Ioan Evans: asked the Secretary of State for Employment what consideration he is giving to finding alternative employment for those employed in defence industries who may be affected by the Government's defence expenditure review.

Mr. Leslie Huckfield: asked the Secretary of State for Employment what studies he has made about ways in which reducing armament manufacturing may be phased together with increases in civil production to avoid loss of employment opportunities.

Mr. John Fraser: The employment implications of a revision of the defence programme are being studied as an integral part of the review.

Mr. Cook: I thank my hon. Friend for his reply. Does he agree that the present scale of the armaments industry represents a burden on the economy which we have carried for too long and can no longer afford to support? Does he accept that if the economy is to benefit from a reduction in the arms industry it will do so only if attention is properly drawn to consultations with the Secretary of State for Defence on the cuts which he proposes to make in the arms industry so that the manufacturing resources thus freed are fully redeployed?

Mr. Fraser: I am grateful for my hon. Friend's support for a reduction of several hundred million pounds in defence expenditure. The way in which the review takes place must take into account the needs of defence in areas which may experience a greater level of unemployment. This matter will be subject to consultation. It is important to examine means by which savings in manpower can be effected in areas where there may be a shortage of labour.

Mr. Teddy Taylor: When will the hon. Gentleman remove the uncertainty about the defence aspects of arms supplies which are affecting jobs and causing worry to many people? In the specific case of the supply to Saudi Arabia of arms worth millions of pounds, will the Government make it clear whether they approve of the state of democracy in Saudi Arabia and the facilities given to free trade unions there, so that workers employed in producing weapons for that country will know that the Government are prepared to let them continue to do so?

Mr. Fraser: The Question relates to a review of our domestic defence expenditure, which is being undertaken in the first instance by my right hon. Friend the Secretary of State for Defence.

Mr. Evans: Bearing in mind that the Government have inherited a £4,000 million deficit and that we are spending more on defence than we can afford, we expected a massive reduction in defence expenditure and one of the arguments used was that it would involve the loss of a great many jobs. Will my hon.


Friend's Department prepare suitable work for the people involved in terms of constructive employment in the building of houses, meeting other needs of the country and solving our balance of payments problems?

Mr. Fraser: It must not be forgotten that we have far fewer reserves of labour than many other countries. In the first instance the decisions must be taken by my right hon. Friend the Secretary of State for Defence. But we shall examine the manpower implications and ensure that we use our manpower in the best way possible for peaceful purposes.

Mr. Burden: If defence cuts of the size suggested are imposed and if the present rate of inflation continues, we shall be left with no defence at all. In the meantime, will the hon. Gentleman consult his right hon. Friend the Secretary of State for Defence to let the workers in Chatham Dockyard know exactly what is their future?

Mr. Fraser: Of course people will be anxious to know their future, and the Defence Department will take into account employment implications in its review. The proposal is to effect savings of several hundred million pounds. However, I cannot agree, even by the widest stretch of the imagination, that that would leave the country defenceless.

Hazardous Products

Mrs. Sally Oppenheim: asked the Secretary of State for Employment what steps he is taking to hasten the implementation of Article 6 of the EEC draft directive No. 67/548, 1967 on the marketing of hazardous products; and what interim steps he is taking to implement the objectives of Article 6.

The Under-Secretary of State for Employment (Mr. Harold Walker): Directive 67/548 is an adopted directive concerned with the labelling of industrial chemicals which will make a useful contribution to the improvement of industrial safety. My Department is therefore anxious to implement it as quickly as possible. However, a number of important amendments are being prepared by the European Commission in order to bring the directive up to date and make it more effective. My Department is

playing an active rôle in this work, in consultation with all major United Kingdom organisations which have an interest. Steps will be taken to implement the directive as soon as the major amendments have been agreed.

Mrs. Oppenheim: Is the hon. Gentleman aware that his reply illustrates the futility of transferring to his Department responsibility for the marketing, labelling and packaging of hazardous consumer products, which were the subject of my Question? What is more, I know what the remainder of the directive is about. Is the hon. Gentleman aware, further, that more than 8,000 children a year are admitted to hospital, some of whom are maimed and others of whom die, as a result of the sale of these hazardous products? Are not we lagging behind other countries with regard to precautions such as protective packaging and adequate warning labels? What is the view of the hon. Gentleman's Department about the report of the Sub-Committee on Social and Economic Affairs of the EEC on future amendments to the directive?

Mr. Walker: The hon. Lady is aware that amendments are being considered by the EEC. Therefore, having regard to the enormous amount of time and expense involved in the basic redesigning of labels, we believe that it is advisable to wait for the amendments to be decided. I think that the hon. Lady overlooks the fact that the directive does not deal with medicinal products.

Mr. Speaker: Mr. Molloy.

Mr. Molloy: rose—

Mrs. Oppenheim: On a point of order, Mr. Speaker. In view of the unsatisfactory and derisory nature of the Minister's replies, I beg to give notice that I shall seek to raise the matter on the Adjournment as soon as possible.

Mr. Molloy: Further to that point of order, Mr. Speaker. If I am correct, I understood you to call me, and my supplementary question ought not to have been precluded by the hon. Member for Gloucester (Mrs. Oppenheim).

Mr. Speaker: If an hon. Member raises a point of order of the kind that the hon. Member for Gloucester (Mrs. Oppenheim) has done, I am afraid that it shuts out further supplementary questions.

Disabled Persons (Southampton)

Mr. R. C. Mitchell: asked the Secretary of State for Employment how many registered disabled people in the Southampton area were unemployed at the latest available date; and what percentage this represents of the total number of registered disabled in the area.

Mr. Harold Walker: On 13th May the number of unemployed registered disabled people in the Southampton area was 321. This represented 8.8 per cent. of the total number of registered disabled people in the area.

Mr. Mitchell: Can my hon. Friend show how those figures compare with the previous figures and with the national average?

Mr. Walker: I can give my hon. Friend a comparison with the previous year. If he wants me to go back any further, perhaps he will write to me. There has been a welcome improvement in the employment position of registered disabled people both nationally and in the Southampton area compared with the preceding year. Nationally the number of unemployed registered disabled people fell from 74,253, or 12.4 per cent. of the register, in May 1973 to 61,506, or 10.7 per cent. of the register, in May 1974. In the Southampton area the figure fell from 398, or 10.7 per cent., to the figure which I gave in my answer of 321, or 88 per cent.

Mr. Greville Janner: What steps is my hon. Friend taking to continue this very welcome trend?

Mr. Walker: The House will know that the employment of disabled people is one of the matters that we have under review. We have received comments on the consultative document put out earlier by the Department, and we are proceeding with this with all possible speed. We hope to be able to report something to the House very shortly.

Social Contract

Mr. Biffen: asked the Secretary of State for Employment if he is satisfied with the current progress of the social compact in respect of white collar and managerial trade unions.

Mr. McCrindle: asked the Secretary of State for Employment if he is satisfied with the progress being made on the social contract.

Mr. Foot: Good progress, I believe, is being made in my discussions with others concerned about the arrangements which are to follow the abolition of compulsory wage controls.

Mr. Biffen: Would not it be wise and realistic to acknowledge that the reaction of the white collar and managerial unions is decidedly less than enthusiastic towards the social contract? In view of the fact that tomorrow the executive of NALGO will be presenting to its conference a highly critical resolution on the TUC General Council's relationship with the social contract, would not this be a convenient opportunity for the right hon. Gentleman to comment on the resolution?

Mr. Foot: I do not know about commenting on the resolution, but I am happy to comment on the hon. Gentleman's supplementary question. Everything that I have heard from the white collar and managerial trade unions concurs with the view that they wish to see the removal of compulsory wage controls. Whatever variations there may be about what should follow, there is growing support for that. I think it is almost unanimous now that wage controls should be removed, and I am glad to see that the white collar unions are in full support of that aspect of Government policy.

Mr. Christopher Price: Is my right hon. Friend aware that 3,000 London schoolchildren were sent home today because of the dissatisfaction of their teachers with the present state of their pay structure? Is he aware, further, that there is a great need for urgency in the inquiries which have been launched into the pay of both teachers and nurses? Can my right hon. Friend say when he expects those two inquiries to be completed so that we may give teachers, nurses and others a clear view of what their future pay structure is likely to be?

Mr. Foot: I appreciate what my hon. Friend says about the urgency of these matters. It is not for me to state the exact dates when this will happen because these matters fall within the responsibilities of the Department of Education


and Science and, in the case of nurses, the Department of Health and Social Security. But we are trying to have these inquiries and reviews speeded up as much as possible. As my hon. Friend is aware, we have also arranged that the awards under the reviews shall be backdated. Therefore, I think the teachers will believe that the present Government have done their very best to meet the situation and to assist them generally. There is a further Question on the Order Paper relating to these matters. There will, however, be these full-scale reviews. We want them completed as soon as possible. In any event the resulting awards will be backdated, and that is one of the conditions for which the teachers have asked.

Mr. Barry Henderson: Will the right hon. Gentleman consider extending the social compact to envisage the possibility of a strikes holiday? Does he accept that if such an extension were made it could have a practical effect on the national economy in which there would be major advantages for employers to offer substantial increases in wages in order to encourage such a situation to be brought about?

Mr. Foot: Yes, we are doing everything possible to try to create the conditions whereby there can be industrial peace. That is one of the major reasons why we are getting rid of the 1971 Act. We think that is an essential process in trying to restore the prospect of industrial peace. But we are also taking action in every individual case in which we can. We cannot say that we are successful in every case, but we think that we have had quite a number of successes. For example, in the engineering union an overtime ban was proposed under the previous regime but we created conditions whereby that ban has been lifted and the prospect of industrial peace has broken out in the engineering union. We have not had much commendation from Opposition Members about it, but I am sure that they will come round to that point of view in the end. We are doing our best in every possible case to ensure industrial peace, which has to be sustained. But we know that in order to do that we have to create proper conditions for it, and that is what we are trying to do.

Redundancy Payments

Mr. Terry Walker: asked the Secretary of State for Employment if he will take steps to increase the maximum figure of redundancy payments, in view of the decrease in the value of the £ sterling.

Mr. John Fraser: My right hon. Friend is prepared to consider proposals for desirable changes to the statutory redundancy scheme. They will be included in the forthcoming employment protection Bill and my hon. Friend's suggestion will be considered in this connection.

Mr. Walker: That is very welcome news, because due to the growth of technology more and more workers are now reliant on the Redundancy Payments Act. This statement by the Minister will be very welcome indeed.

Mr. Fraser: I am grateful for my hon. Friend's remarks.

Nationalised Industries (Employee Participation)

Mr. Cryer: asked the Secretary of State for Employment if he will prepare plans for the democratic election of workers' representatives to the boards of nationalised industries: and if he will make a statement.

Mr. Booth: As I promised on 18th March in reply to a Question from the hon. Member for Christchurch and Lymington (Mr. Adley)—[Vol. 870, c. 30]—the Government are considering ways of making the managements of nationalised industries more responsible to the employees in the industries as indicated in our election manifesto.

Mr. Cryer: I thank my hon. Friend for that reply. Does he not accept, however, that the nationalised industries should be the pacemakers in industrial democracy? Will he consult the unions about producing a plan in this respect? Will he accept that the principle of public ownership would have much wider acceptance if it seemed to be Socialist in character?

Mr. Booth: The special conditions that apply to a nationalised industry in this respect depend to a very large extent upon the form in which the industry is nationalised and the terms of the Act.


However, I am convinced that there is a will to negotiate and to determine matters in nationalised industries, as has been evidenced by developments in the National Coal Board, which bodes well for an extension of nationalised industry. I take my hon. Friend's point. We are to have a number of discussions with trade unions in preparation for our industrial democracy Bill which will reflect, I hope, the possibilities which exist in the public sector which would enable these industries to become pacemakers in this respect.

Mr. Farr: Is the hon. Gentleman aware that most nationalised industries already have a difficult enough time in making ends meet without the addition of a large number of ghost directors, whose main preoccupation would surely be that of improving the lot of employees?

Mr. Booth: The efficiency of nationalised industries, as of industries in the private sector, can be considerably improved by having effective schemes for industrial democracy and by the promotion of effective representation of workpeople's interests in these firms and industries.

Employment Agencies

Miss Boothroyd: asked the Secretary of State for Employment what advice he has given to metropolitan boroughs regarding the licensing of employment agencies; and whether he will make a statement.

Mr. Harold Walker: My officials wrote to the chief executive officers of licensing authorities designate, including the metropolitan district councils, in England and Wales on 1st February 1974 drawing attention to their forthcoming responsibilities under the Employment Agencies Act 1973 and to the need for some preliminary consideration to be given to the organisation of the task.
My officials have also been in touch with the relevant local authority associations, including the Association of Metropolitan Authorities, on matters which are of particular concern to the licensing authorities designate.

Miss Boothroyd: Is my hon. Friend aware that three employment agencies

control over 400 branches throughout the country? Is he further aware of the element of profit made by those branches when industry, both private and public, buys back the skills and talents already developed by taxpayers' money in terms of education and training? Will he instruct local authorities to control the mushrooming of these agencies? Furthermore, will he look to his own Department and consider developments to make it much more attractive as an employment agency?

Mr. Walker: On the latter part of my hon. Friend's supplementary question I hope that the improvements which are now taking place, which I think all hon. Members will have noticed in their constituencies—the creation of jobcentres and so on—will be seen by her as a positive response to that for which she is asking. On the earlier part of my hon. Friend's question, I am sure she will recognise that the Employment Agencies Act is a significant step forward in what has been for many years an unregulated field. She is absolutely right when she talks about a mushrooming of these agencies. Hence the importance of the Act and the urgent need to produce the regulations for which the Act provides. I hope that within a very short time we shall be sending out draft regulations for consultation to interested bodies such as the CBI, the TUC and others.

Mr. Kenneth Lewis: Is the hon. Gentleman aware—I am sure he is—that when the Employment Agencies Bill was going through the House and when it eventually became an Act it was obvious that the private employment agencies were very glad to have the Act on the statute book, and that there has all along been full co-operation from them? As the hon. Gentleman has said that draft regulations will soon be sent to interested bodies, can he give a date when the regulations might be functioning?

Mr. Walker: I agree with the hon. Gentleman that the Act was warmly welcomed by the more reputable agencies, the highly-respected and long-established agencies, because of their concern about some of the apparent malpractices that were growing up among certain agencies. On the latter part of the question, the draft regulations are now on my desk.


I am hoping to clear them by this afternoon and, therefore, to have them available for the consultative process very quickly indeed.

Trade Unions (Mergers)

Mr. Madel: asked the Secretary of State for Employment what recent discussions he has had with the TUC on the merger of trade unions in specific industries to form single craft unions for such industries; and if he will make a statement.

Mr. Booth: My right hon. Friend has had no such discussions. It would be a matter for the trade unions themselves.

Mr. Madel: In view of the many difficulties that occur in industry due to inter-union rivalries, may we take it that one of the first tasks of the new conciliation and arbitration service will be to promote and facilitate the merger of unions in certain industries?

Mr. Booth: The trade unions have shown themselves well able to manage their own affairs in this respect. In recent years there has been a continuing process of amalgamations. In 1961 there were 655 unions with nearly 10 million members, whereas at the end of last year there were fewer than 500 unions, representing over 11 million members. There was, therefore, a reduction during that period of over 150 unions. One should relate this reduction to the number of employers' organisations. There are over 1,000 employers' organisations. The hon. Member might consider urging employers' associations to amalgamate.

Mr. Skinner: Does it make my hon. Friend feel a little sick to hear the statistics coming from the Opposition about amalgamations of unions when within the last two or three years Conservative Members, assisted by the Government Front Bench when they were in office, have been actively engaged in trying to get unions to splinter off and to register when the rest of the trade union movement was refusing to register, and have been encouraging associations of registered trade unions to work in conflict against the established trade union movement?

Mr. Booth: I agree with my hon. Friend, who has described admirably one of the adverse effects of the 1971 Act.

Mr. Hayhoe: Surely the Minister will accept that industrial disputes arising from inter-union rivalry damage the economy. Can he, however, give any instance of a dispute between employers' associations which has led to damage to the economy?

Mr. Booth: Disputes between employers' associations ostensibly come to light often only in the form of firms going bankrupt or rationalising facilities, which leads to curtailment of employment prospects.

Nurses' Pay

Mr. Molloy: asked the Secretary of State for Employment if he will make a further statement in relation to nurses' pay.

Mr. Foot: I explained to the House on 6th May that I was able under the existing legislation to apply my powers of consent in respect of the pay increases sought for nurses, teachers and Post Office workers only to certain special problems where there were exceptional circumstances. I have never had any doubt, however, that nurses and these other two groups have suffered particularly badly under the policies pursued by the last Government; and now that we can look forward to seeking parliamentary approval to abolish the statutory pay controls as soon as possible in July after the Prices Bill is enacted, the Government have thought it right to set in train action to give them a remedy as quickly as possible after the statutory controls have gone. On this basis the Government have provided for independent inquiries to be held into the pay not only of nurses but also of teachers and have agreed that the Post Office should seek to remedy the position of some of its staff in negotiation with the unions concerned.
We believe that this action to deal with these particularly acute problems resulting from the previous Government's policies is in the interests of a smooth transition to sensible voluntary collective bargaining. But if we are to achieve that transition we must ask that others accept the justice of the claims of nurses and these other two groups for this redress and hold themselves to the agreements they have already reached.

Mr. Molloy: I thank my right hon. Friend for that neat and comprehensive


statement, which will give justifiable confidence to the groups of workers he has mentioned. May I put to him the fact that yesterday a large number of nurses, organised by their trade union, the Confederation of Health Service Employees, with which I have associations, lobbied the House and were able to make it clear that the nurses more than almost any other group have suffered enormously— [HON. MEMBERS: "Question."] It is regrettable that Conservative Members should show such intolerance whenever the nurses are mentioned.

Mr. Speaker: Order. That is an abuse of the supplementary question system. The hon. Gentleman must ask a brief supplementary question.

Mr. Molloy: With great respect, Mr. Speaker, if you had been standing where I am trying to put my Question, you would have heard quite a lot of other abuse. I was going to say to my right hon. Friend—

Mr. Speaker: Order. The hon. Gentleman should be one of the last hon. Members to object to sedentary interruptions.

Mr. Molloy: Is my right hon. Friend aware that in their campaign the nurses are ever mindful of the patients they serve and they firmly believe that they will obtain justice under the present Government? Is he also aware—

Mr. Speaker: Order. We have had enough now.

Mr. Foot: I am most grateful to my hon. Friend for his questions, and I hope he will continue to put them, from whatever position he may select. We appreciate that the nurses have a strong case. That is why the Government have gone very far to meet what they propose. Some of the organisations representing nurses, or one of them at least, are still pressing the claim for an interim payment. I understand the reason why they put that case, but there are great difficulties for the Government in agreeing to interim payments, even for such an excellent case as that of the nurses, because of the possible effects in many other sectors. I believe, however, that when the Government decided to backdate the agreement that was to be the result of the review, they were going very far to meet the just claims that the nurses are making.

Mr. Whitelaw: Does the right hon. Gentleman agree that the remarks of his hon. Friend the Member for Ealing, North (Mr. Molloy) about the Opposition's attitude on nurses' pay are totally unjustified? Does he also agree that, with the arrangements that have been made for an inquiry and the backdating, it would be most reasonable and in the interests of the whole nation that the industrial action of COHSE should be called off? We in the Opposition would strongly support that, as we also strongly support the need for a good deal for the nurses.

Mr. Foot: I do not think I should intervene in the quarrel between the right hon. Gentleman and my hon. Friend.

Mr. Whitelaw: Quarrel?

Mr. Foot: It was an argument. The right hon. Gentleman was asking for my protection, and I do not see why I should give it. But I agree with the right hon. Gentleman and with what my right hon. Friend the Secretary of State for Social Services has already said on the subject. In view of what the Government have done, I think it is much more sensible that the industrial action should be called off. I believe that in a few weeks' time everyone will recognise that the Government, in preparation for the changeover from the compulsory system to the voluntary system, have taken reasonable steps to help not only the nurses but the teachers and the Post Office workers.

ECONOMIC POLICY (CHANCELLOR'S SPEECH)

Ql. Mr. Bruce-Gardyne: asked the Prime Minister whether the public speech of the Chancellor of the Exchequer to the annual dinner of the Confederation of British Industry in London on 14th May about the Government's attitude to profit and the private sector represents the policy of Her Majesty's Government.

Mr. Nigel Lawson: asked the Prime Minister whether the public speech of the Chancellor of the Exchequer on the economy at the CBI dinner on 14th May represents Government policy.

Mr. George Gardiner: asked the Prime Minister whether the Chancellor


of the Exchequer's public speech to the CBI on economic policy on 14th May represents the Government's policy.

Mr. Tebbit: asked the Prime Minister if the public speech made by the Chancellor of the Exchequer to the CBI on economic affairs on Tuesday 14th May represents Government policy.

Mr. Wyn Roberts: asked the Prime Minister if the public speech of the Chancellor of the Exchequer to the CBI on economic matters on 14th May represents Her Majesty's Government's policy.

Mr. Ridley: asked the Prime Minister whether the speech of the Chancellor of the Exchequer on 14th May to the CBI on the profit motive represents Government policy.

The Prime Minister (Mr. Harold Wilson): I would refer the hon. Members to the reply which I gave on 21st May to the hon. Member for Derbyshire, South-East (Mr. Rost).—[Vol. 874, c. 108-9.]

Mr. Bruce-Gardyne: Can the Prime Minister explain what is the use of the Chancellor saying that his Government —by which he presumably means the Government to which he belongs—believe in the need for profitable investment when the Secretary of State for Industry is busy fashioning his oddly-named Enterprise Board to nationalise what he picks out as the key sectors of the economy? Can the Prime Minister at least tell the House which side of the argument he is on, or is he, as usual, a "don't know"?

The Prime Minister: In the speech to which the Questions refer, my right hon. Friend the Chancellor repeated what has been said by myself, by him and by others on a number of occasions now and under the previous Government. As far as I am aware, what my right hon. Friend the Secretary of State for Industry has been saying is entirely in accordance with the manifesto which we presented to the country during the election. [Interruption.] It is entirely consistent with that. When my right hon. Friend the Secretary of State is ready to make statements to the House with the full authority of the Government, having brought them before the Government, the hon. Gentleman will be able to study

what it is he will be voting upon. 1 support the manifesto on which we fought the election. I have never found out whether the hon. Gentleman supported the manifesto on which he was elected in 1970.

Mr. Lawson: In his speech the Chancellor said that he believed in private industry that was vigorous, alert, imaginative and profitable. Is the Prime Minister saying that to nationalise the largest companies, which it is the policy of his right hon. Friend the Secretary of State for Industry to nationalise, is likely to make them more vigorous, more alert, more imaginative or more profitable, particularly in the light of his own remark that he was not in favour of raising the efficiency of Marks and Spencer to that of the Co-op?

The Prime Minister: It was not my remark. I wish I had thought of it, but I only repeated it. It was originally made by my right hon. Friend the Secretary of State for the Environment. Everyone gets credit for his own. My right hon. Friend the Chancellor was exactly stating the Government's position. I thought that successive Governments believed in a mixed economy and that the argument between us over a quarter of a century, or perhaps more, has been about where the boundaries should be drawn between the private and the public sectors. I hope that all the adjectives quoted by the hon. Member for Blaby (Mr. Lawson) are the desire of all of us, on both sides of the House, for the private sector.

Mr. Atkinson: Does my right hon. Friend agree that there is something fundamentally wrong with the imaginative private enterprise system if it needs an injection of between £2 million and £4 million a day subsidy from the taxpayer?

The Prime Minister: In commenting on private ownership in industry I have never thought of using words as strong as those used by my predecessor about capitalism. It has been the desire of successive Governments to ensure that private ownership should be responsive to the needs of the community in a wider sense than considerations only of its private profit. That is what the Leader of the Opposition was referring to on a famous occasion. I remind Conservative Members who are upset about take-over


by due legislative process that a relatively small firm such as Slater Walker has carried out far more take-overs than those proposed at any time by my right hon. Friend the Secretary of State for Industry.

Mr. Gardiner: In view of the optimism of the Chancellor's speech, may I ask the Prime Minister whether he accepts the National Institute's forecast that production is likely to remain stagnant and investment is likely to fall?

The Prime Minister: I do not think my right hon. Friend was noticeably optimistic. What he said was realistic. The National Institute for Economic and Social Research, for which we all have great respect, has given its views. It is difficult for it, for the Government, the Opposition or anyone else at this moment to form a very clear view because the indices on which all of us have to work are still not sufficiently up to date in relation to the period following the three-day week. All who are making prognoses for the future are using figures based on either the three-day-week period or the period immediately after it.

Mr. Tebbit: Would the Prime Minister care to define for the benefit of the House and industry generally what the Chancellor meant by "proper social use of profits", as it would appear that profits are not permissible unless proper social use is to be made of them?

The Prime Minister: I think that my right hon. Friend, who will no doubt be glad to develop this more fully in the continuing debates on his Budget, had in mind a number of aspects of "proper social use". The most important social and economic use is for profits to be ploughed back for investment purposes rather than to be distributed.

Mr. Roberts: How does the Prime Minister reconcile the Chancellor's attempts to allay fears of nationalisation with the attempts of the Secretary of State for Industry to boost such fears? Is not this irreconcilability between the right hon. Gentlemen having a disastrous effect on investment?

The Prime Minister: I have already answered that twice this afternoon. My right hon. Friend the Chancellor was

talking about the private sector of industry. As I have tried to say, there may be arguments between us about where the boundaries should be drawn between private and public industry. This is one of the things dealt with in our manifesto and repeated by my right hon. Friend the Secretary of State for Industry. In a mixed economy there must be an adequate degree of economic success within the private sector. That was what my right hon. Friend was saying.

Mr. Ridley: Is the right hon. Gentleman aware that the Chancellor's words do not tie in with the Government's actions and that higher taxes, price control and the possibility of vastly increased wage claims are leading to a crisis of confidence in industry which is already showing itself in a failure to make investment decisions? If the Government really believe in profitable private enterprise, will they reverse some of the disastrous economic policies upon which they have embarked?

The Prime Minister: The hon. Gentleman is rather misunderstanding the situation. He has referred to extortionate wage claims. There have been substantial increases in wages recently in view of the operation of the threshold which was supported by our party and carried through by the party opposite in what I think was then a mood of optimism based on the belief that there would be a rather lower rate of increase in world prices. I do not think that the hon. Member is justified in saying what he has said about wages at present. As for investment intentions, investment under the previous Government never got back to the figure at which it stood in 1970. The reduction in investment intentions over the past few years occurred well before the Budget. A number of other surveys of investment intentions—the CBI and the Financial Times surveys, for instance—confirmed that. The main cause of this reduction was the general uncertainty following the energy crisis. It was the energy situation and the three-day week which more than anything else cut back confidence in British industry.

Mr. Skinner: Would my right hon. Friend be prepared to comment—in this doom-laden situation about which we hear so often—upon the fact that Sir William Armstrong, head of the Civil


Service, is to receive £34,000 as head of the Midland Bank plus an £8,000 pension? If there is enough money around to pay that kind of salary and pension to this man, why do we so often hear talk about there not being enough in the same pot for the workers?

The Prime Minister: I have already answered questions about Sir William Armstrong and I have nothing to add to what I said on that occasion. Certainly in so far as the questions are about profits—and most of them have been today, arising out of my right hon. Friend's speech—it is a fact that every week in the Sunday Times Business News one can see the profit figures for the previous year. The current figures show substantial increases. It is a fact, which my right hon. Friend welcomed, as I do, that a considerable part of any increase in profits being earned today is earned because more industrialists, who face fairly strict price controls as a result of the activities of both Governments, are turning more to exporting. In the current situation there is a chance of earning more profits in this direction as well as helping our balance of payments deficit.

Mr. Heath: Is the Prime Minister aware that he has amply demonstrated this afternoon that it is impossible to reconcile the statement of the Chancellor at the CBI dinner with the statement of the Secretary of State for Industry? Is it not a fact that the real policy of the Government is that expressed by the Secretary of State for Industry and that the remarks of the Chancellor about profitability were added as an afterthought to his speech, as a sop to the industrialists who were present, at a time of rapidly declining investment? The Prime Minister asked my hon. Friends to await a statement to Parliament from the Secretary of State for Industry. Is it not also the fact that his plans have just been published by Transport House in a document headed "The Current Work Programme of the Department of Industry. Note by Tony Benn"? What exactly is the constitutional position of this document? Have the Government now handed over complete control of their policy to Transport House? Have they abdicated the work of government, and are all future statements on policy to be issued by Transport House instead of by the Department to Parliament?

The Prime Minister: The right hon. Gentleman, as the architect of our investment decline, is now seeking to find an excuse to get away from his responsibilities. [HON. MEMBERS: "Answer."] Before I answer the right hon. Gentleman's hysterical questions, and I have already dealt with the earlier parts of them three times this afternoon, I will point out to the right hon. Gentleman that no Prime Minister has ever been more confident about increased investment than he was as soon as he had negotiated the terms for entry to the Common Market. He spoke at the Guildhall and called on industry for a massive increase in investment, which never happened. Investment never got back to the 1970 figures.
The document referred to by the right hon. Gentleman—I am glad he is on the Transport House mailing list, because of may help to educate him out of some of the fallacies which produced the industrial disaster earlier this year—is exactly what its title, which he read out, suggests. This is the basis on which my right hon. Friend is working within the manifesto approved by the whole of the Labour Party, the National Executive and the Shadow Cabinet. Policy decisions will be a matter for the Government. Once again I would refer the House to the clear answer given on these matters by my right hon. Friend the Secretary of State for Trade to the hon. Member for Truro (Mr. Dixon) yesterday. The Government will take responsibility for these matters and the House will have the fullest opportunity of debating them and discussing any legislation which is brought forward.

Mr. Heath: The Prime Minister cannot be allowed to get away with that. This is a document which by all constitutional processes ought to be published either by the House or by the Department concerned. Instead of that, it is clear from its title that the working programme in the Department is now being issued in a document by Transport House. If that had happened under the last Government, the right hon. Gentleman would quite rightly have criticised us for issuing such a document through Central Office in Smith Square. The Prime Minister must take this matter seriously and recognise that if he is now to abdicate government to Transport House he had better say so openly, so that we know where we stand.

The Prime Minister: I am surprised (hat after three months of it the right hon. Gentleman does not know where he stands. The rest of the country knows. I am surprised to hear questions from him on these matters because whenever he could do so he made his statements outside the House of Commons, at televised Press conferences in Lancaster House, from Conservative Central Office, the Tory Party conference and so on. There has never been such a record— [Hon. Members: "Answer the question."] I have answered the question. I know that Conservative Members do not want to listen to the answer, but I will give it to them for the fifth time. The work being done follows the work on the manifesto that we put openly to the country in the General Election, and when the priorities are decided by the Government the results of our work will be brought to the House. The right hon. Gentleman will then have adequate opportunity in the years ahead to debate the successive development of these programmes.

SECOND BUDGET

Mr. Cormack: On a point of order, Mr. Speaker. In replying to a supplementary question on Question No. 1 the Under-Secretary of State for Employment said that, if necessary, the Chancellor of the Exchequer would introduce a second Budget. Since the right hon. Gentleman said when he introduced his Budget in March that there would be a second Budget, can you arrange for a statement to clarify matters?

Mr. Speaker: I do not detect anything for the Chair in that.

PENSIONS INCREASES (PAYMENT)

The Secretary of State for Social Services (Mrs. Barbara Castle): With permission, Mr. Speaker, I should like to make a statement about the settlement of the staff dispute in my Department.
The House knows that the preparatory work required to be done in local and central offices of my Department to ensure the payment of increases in retirement pensions and other social security benefits by 22nd July, as announced in the Budget, has been delayed by a dispute involving staff associations repre-

senting the staff of those offices. This matter has now, happily, been settled. The CPSA, representing the clerical grades, reached agreement with my Department yesterday; the Society of Civil Servants, representing the executive grades, had done so, and had removed its ban on overtime, on 28th May. I have myself met representatives of both associations on a number of occasions during the negotiations. The dispute derived from the Government's anxiety to carry out their election pledge to increase benefits at the earliest possible date and the conviction of the DHSS staff associations that the shortened programme proposed for doing so would require a considerable extra effort of their members in local offices, which effort, they claimed, should be recognised by the offer of some form of incentive.
The staff associations have contended throughout the dispute that successive Governments have tended to place increasing burdens on their members as a result of changes in social policy without making sufficient provision to enable them to discharge those tasks without excessive overtime or strain. In particular, relationships with staff in my Department have worsened in the past three years, partly because of attempts by the previous Government, later abandoned, to hold down necessary increases in staff numbers, and partly because of strong feeling about the rigidity of phases 1 and 2 of the Pay Code—though this of course affected the whole Civil Service. Although these anomalies have since been corrected, they have left a legacy of bitterness which has led to this dispute.
I fully accept that the staff have always been in favour of pensioners, widows and others receiving their increases as quickly as possible. I also accept that the programme I have proposed for the uprating, as I explained to the House at the time, will call for greater effort by the staff than we should normally demand.
Recognising the real problems involved, I have undertaken that everyone in the Department—Ministers and officials alike —will do their utmost so to plan future programmes of major social security operations that peaks and troughs of activity are, as far as is possible, avoided and that any necessary additional staff are recruited and trained in time to take a share of the additional load. I have


also agreed to have an immediate joint examination to see how far the pay, grading and structure within the Department matches the needs of the work. A report will be prepared by the end of the year. To the extent that this examination shows an agreed requirement for the pay of any group to be redetermined, this would be done within the framework of the national pay agreement current at the time. As an earnest of my intention to see that progress is made in both these directions I shall be meeting representatives of the staff side from time to time to review progress, and this will include a whole-day conference in the autumn.
These measures are designed to bring about fundamental, longer-term improvements. In relation to the current exercise, as the incentive which the staff associations have been seeking, and in recognition of the pressure imposed by the up-rating, the Government have agreed to a bonus in the form of additional leave to be earned in relation to overtime worked on the uprating. This bonus for this particular operation, though not in the form of cash as the staff side would have liked, will be additional to payment at normal overtime rates in respect of the same hours worked, which rates have themselves been substantially increased for the Civil Service as a whole with retrospective effect to the beginning of the year. Coupled with this are immediate improvements to local office complements and complementing procedures, and an undertaking of ministerial involvement in discussions on accommodation problems. The career structure of the Department will also be improved by the provision of more senior management posts and the consideration for promotion, at an earlier stage in their careers than happens at present, of clerical officers with promotion potential.
I have accepted from the outset the expressions of willingness by the staff associations, given proper recognition of what was being required of those employed in local offices, to encourage their members to do their utmost to put through the benefit increases by 22nd July. I know that the House will have been pleased to read in this morning's papers that such encouragement has been forthcoming.
The House will want to know what might now be expected with regard to the uprating programme. Given the determination of all concerned to make up as much lost time as possible, I hope that the great majority of retirement and widow pensioners, whose order books are prepared in Newcastle, will receive their higher rate of pension as from 22nd July, although a comparatively small minority may suffer delays of a week or two. With the best will in the world, the uprating for supplementary beneficiaries, which has to be done individually in local offices, will in some cases be delayed. My Department will, however, issue guidance on this before 22nd July, when we see how this programme is going. I hope, however, that national insurance beneficiaries, such as those on sickness benefit paid from local offices, will in the main get their higher payments on time.

Sir Geoffrey Howe: Will the Secretary of State accept that we welcome the settlement of this protracted dispute, though we cannot accept that she is right in laying the blame for the underlying grievances on circumstances arising under the previous Government when she acknowledges that the anomalies to which she referred have been corrected, and when she told the House on 28th March, when she was deciding on an early uprating, that she was taking a calculated risk and that the responsibility would be not that of the DHSS staff but her own? Will she also accept that the House appreciates the substantial burden of work and responsibility that lies upon the staff of her Department?
Can the right hon. Lady give any indication of the additional costs in public expenditure or staff equivalents of the settlement she has arrived at, if it can be put in those terms? Can she also say for how long the payment of supplementary benefit to beneficiaries is to be delayed so far as she can estimate that? Is family income supplement likely to be paid at the increased rate on time? What proportion of sickness and National Insurance beneficiaries are likely to have their payments deferred?

Mrs. Castle: I would not expect the right hon. and learned Member for Surrey, East (Sir G. Howe) to accept any share of the responsibility for the low


state of morale in my Department among the staff which I inherited. None the less, history is history and facts are facts.
I welcome that the right hon. and learned Gentleman recognises, unlike The Times in a disgraceful leader last weekend, that the staff in my Department discharge a hard, onerous and responsible task. I said when I announced the uprating that I was deeply conscious of the extra burdens I was putting upon them. I ask the House to unite in paying a tribute to the work they do so that we may all express the hope that we can now proceed with the uprating with all possible speed.
I cannot give the right hon. and learned Gentleman any estimate at this stage of the cost of the arrangements we have agreed upon. Improvements in accommodation, for instance, might be hard to quantify. We have agreed to 500 additional staff to improve the complement in local offices, and we are working on improvements in the career structure, the cost of which is difficult to quantify. However, if the right hon. and learned Gentleman would like me to pursue the matter and get him some figures, I would be glad to write to him, or he may care to put down a Question.
I am afraid that I cannot give the House any estimate at this stage of the extent of the delay likely to be experienced in the payment of supplementary benefits. It is absolutely too early to say; it depends on the response that the staff now give and on how much overtime they find it physically possible to work. I have said that I will be making another statement about this before 22nd July, and if I have any information in the future I shall certainly make it available to the House.

Mr. loan Evans: Is my right hon. Friend aware that there will be general satisfaction in the country that she has succeeded in settling this dispute and that she is now to meet the target date for giving increases—the highest increases that there have ever been in the minimum of time? However, there is anxiety among pensioners and other beneficiaries. Does she agree that she should provide the maximum publicity to assure them that at the earliest possible moment they will receive benefit?

Mrs. Castle: I am grateful to my hon. Friend. I will certainly do all I can to reassure pensioners of three things. The first is that the vast majority, the retirement and widow pensioners whose order books come from Newcastle, will get their increases on time. I also hope that National Insurance beneficiaries paid from local offices, such as those on sickness benefit, will also get paid on time.
The second assurance I give is that, of course, we shall do everything in our power to speed up payment of supplementary benefit. My third assurance is that in all cases entitlement to the increases in payments starts on 22nd July and, therefore, all arrears will be paid in full.

Sir Brandon Rhys Williams: Does the right hon. Lady agree that all this turmoil and uncertainty could have been avoided if the National Insurance system employed a modern data-processing system of the kind which has been in use in other countries for a number of years, and that, instead of coming to a complex arrangement to perpetuate the National Insurance Scheme under the present system of administration, it would have been better to try to modernise the whole apparatus— [HON. MEMBERS: "After three months?"] —to start the job of modernising the whole apparatus so that we can get rid of the administrative difficulties as well as the many deep unfairnesses and anomalies in the National Insurance system?

Mrs. Castle: I cannot accept what the hon. Gentleman said. I had one simple priority—to deal as quickly as I could with the legitimate grievances of the staff so as to ensure that we got this uprating in payment by 22nd July, or as near to that date as possible.

Mr. Bidwell: Is my right hon. Friend aware that the whole of the Labour movement will be delighted to know that she and the Civil Service unions concerned have come to an arrangement whereby it looks as if all pensioners will be paid on time by 22nd July? May I remind her, however, that already the £10 for a single person and the £16 for a married couple have been eroded a little by events of the past few months— inflation and so on? This seems to be a


world problem. I hope that she will stick firmly to the task of relating pensions in future to national average earnings and will not be thwarted or side-tracked from that purpose.

Mrs. Castle: Yes, I can certainly give that assurance. As my hon. Friend knows, it is an integral part of the legislation on the uprating that the pensions review shall in future be linked to average national earnings, and we shall stick by that.

Dr. Winstanley: I welcome the news that the dispute has been settled, but I ask the right hon. Lady to do everything she can to make absolutely certain that pensioners, particularly supplementary pensioners, understand what is happening and that they especially understand that late payments will be backdated. Many elderly people are still not clear on that point. Can she comment on the possible effect of the date of payment on rent and rate rebate applications? I understand from Age Concern that there is a great deal of confusion over whether the date of payment of new benefits will affect entitlement to rebates for certain people?

Mrs. Castle: With regard to publicity, I will so far as it lies within my power get the message across through the media, through the local offices of my Department and by means of the usual publicity. I appreciate that there has been concern and anxiety but I hope that such bodies as the National Federation of Old-age Pensions Associations will help us get the news across.
Yes, I confirm that everyone who would have got an increase on 22nd July will

be entitled to the full arrears on any increase that may not have been put into payment by that date, and the effect of the delay will not disadvantage anyone in any way, for instance in relation to rent or rate rebates.

Mr. Ian Lloyd: The right hon. Lady will doubtless have seen the grave warning by the Bank of International Settlements on inflation either yesterday afternoon or this morning. Can she suggest to the House that there has been in any way in the United Kingdom an increase in real resources to meet this relatively modest and deserving claim? It seems to many of us that every time a settlement is announced in financial terms the person responsible for it should indicate in some way that there is an increase in real resources to meet it, oherwise the effect will be purely redistributive.

Mrs. Castle: I would have thought that the settlement we have reached was a settlement of sheer common sense. If the House of Commons is to pass complicated social legislation to uprate and change benefits from time to time, it is not enough for us just to make policy statements and then leave the overburdened staff, who are badly accommodated, to deal with the public as best they can. Therefore, we have reached an agreement that we will by increasing the staff, by looking at the grading structure and by improving accommodation enable our staff to work more efficiently.

Several Hon: Several Hon. Members rose—

Mr. Speaker: We must now move on. I have a list of about 40 hon. Members who wish to speak in the debate on Europe.

ABOLITION OF PEERAGE BILL

3.48 p.m.

Mr. John Lee: I beg to move,
That leave be given to bring in a Bill to provide for the extinction of all titles attaching to peerages; to provide for the cessation on death or statutory renunciation of all hereditary rights to attend as a Member of the House of Lords; and to provide for the appointment of Senators as Members of that House, including the conversion of present life Peers.
I apologise to the House if I have difficulty in making myself audible, as I am suffering from laryngitis. I shall try to make myself heard as best I can.
Over the past 10 years a very peculiar situation has arisen constitutionally in this country, for the last hereditary peers who were created were included in the resignation Honours List of the right hon. Member for Kinross and West Perthshire (Sir A. Douglas-Home). Since then neither party leader has thought it appropriate to recommend to Her Majesty the creation of hereditary peers. My right hon. Friend the Prime Minister made it clear when he took office in 1964 that he thought it inappropriate that there should be any further such creations. The Leader of the Opposition has not made his position quite so clear. In answer to a Parliamentary Question from the hon. Member for Horncastle (Mr. Tapsell) not long after the 1970 Parliament first met, he said he did not dismiss altogether the possibility of creating such peerages. However, he thought on balance that he would prefer to confine himself to life peerages. Of these, a prodigious number has been created.
The result, which seems to have passed largely unnoticed, is that a weird situation has arisen. The hereditary peerage numbers between 700 and 800. The rate of extinction through failure of an heir is no greater than four or five a year, so it will take several centuries for the system to die out. Meanwhile, and paradoxically, so far from the system becoming more democratic, it becomes less so. The position of the peerage is now more and more likely to equate with that of the continental peerages, which are few in number. Very few have been created since the 1914-18 war, and they rarely attract attention, except when their activities are sufficiently spectacularly scandal

ous,as in the Montesi case, to merit the attention of the lesser Sunday newspapers.
So far from this absence of hereditary peerage creation having made the other place more democratic, over the years it has done the opposite. It cannot be said that the creation of life peerages makes the situation much better. There is some controversy about the creations which have been made—I have reservations about some of them—but that is not the point. The point is that the choice of title is an absurdity. The effect of Mr. Macmillan's Act in 1958 was merely to add yet another rank to the peerage, yet another absurd facet to our peculiar class system, while the other House remains, as it has always been, overwhelmingly the preserve of one party.
There are two ways in which this might be dealt with. Either the Prime Minister should recommend a mass creation of hereditary peerages, particularly of the higher ranks, and ridicule the whole thing out of existence—there might be something to be said for that—or, more simply, we should expunge it altogether. The Bill seeks to do the latter as quickly and painlessly as possible.
Under the Bill, all titles of honour would be expunged on the granting of the Royal Assent—both life and hereditary peerages—and their holders would be converted into senators for life. I leave entirely on one side the question of whether there should be a second Chamber at all. There was an attempt to revamp the other place a few years ago, when the late Dick Crossman produced an ingenious but crack-brained scheme which foundered under the combined efforts of Mr. Enoch Powell and the present Secretary of State for Employment. But so long as that Chamber exists, it seems best to strip it of the absurd feudal flummery attached to it. That is the first reason for making this modest innovation.
The second reason is that if the Bill were passed the overwhelming Conservative majority in the other House would be much more rapidly diminished than has happened so far. At the moment, although my right hon. Friend has certainly not been ungenerous in his peerage creations, they are not sufficient at the present rate of manufacture to reverse the parliamentary majority in the other place.
I hope that the Bill will at least be given a Second Reading. It is absurd that a constitutional change of the kind that has been evolving in the last 10 years should take place without the House or the country being consulted. It is bad enough that we should be discussing the Common Market, that one constitutional change should take place without the full-hearted consent of the British people. The constitution of the other place is not so important a constitutional matter that I wish to be overlong in proposing a change. Equally objectionable constitutionally is the fact that this change should have taken place with scarcely a word of comment. But the most objectionable aspect of all is that the very reverse of what was apparently intended should have happened. By not being added to, the peerage becomes more exclusive and not less so, less democratic instead of more.
I would adapt Oscar Wilde's adage, that there is one thing worse than being talked about and that is not being talked about: there is one thing worse than creating hereditary peerages and that is not creating them.

3.57 p.m.

Mr. Cranley Onslow: I rise to oppose the Motion. So far as the new orthodoxy requires me to declare an interest in this subject by marriage, I am delighted to do so. As for my own direct interest, that is vestigial in the extreme. It would require a major "Kind Hearts and Coronets" operation to bring me close to another place, although theoretically I might find myself in that equivocal position.
In any case, I do not seek to oppose the motion on the grounds of personal interest. There are plenty of other and better grounds that I can adduce. The first and one of the best is that the hon. Member for Birmingham, Handsworth (Mr. Lee) has not made a very good case. I make no criticism of his voice, but his arguments were not of the most compelling. I express no great surprise at that, because I recall how in a previous incarnation, he entertained us one evening in a debate on defence matters with an ingenious, not to say crack-brained, proposal to recruit special murder squads

from the Services which would be parachuted into the territories of Governments unfriendly to us so that we might embark on what I suppose one would now call a policy of renegotiation by assassination.
If there were no more to it than that, I would suggest that we should simply let this proposition, crack-brained or otherwise, pass as a piece of futile eccentricity. But there is another, better, reason. This seems to me an inherently unsuitable subject for a private Member's initiative. The hon. Member may feel that I am turning the tables on him in view of the flatulent filibuster with which he talked out my own proposition to enfranchise the large numbers of people who might otherwise find themselves deprived of a vote at the next General Election. That contrast gives an interesting idea of the hon. Member's democratic priorities and the weight that we should attach to his arguments.
But there is an even more important reason. We have had presented to us, pretty speciously, a piece of republican propaganda of a kind of which we should be increasingly suspicious. I do not mean the kind of republican propaganda with which we have become far too familiar, although I would say that the two people who will come out of last week's unhappy events with the greatest credit and public respect are likely to be those two members of the United Kingdom peerage, Lord and Lady Donoughmore, who have captured the imagination of the public in the two countries rather more effectively than the ghouls in dark glasses who caused us such affront in the pages of the Press.
I oppose this Bill because of the republicanism which I believe underlies it. The hon. Member for Handsworth has flirted with words. He suggested that his right hon. Friend the Prime Minister might be trying to ridicule the other place out of existence. Others of his hon. Friends evidently take the same view. The hon. Member for Fife, Central (Mr. Hamilton) happens not to be with us, but the House will recall that he was recently reported as saying of an event which I think most hon. Members will remember without my reminding them:
This just confirms my view that the sooner we get rid of the bloody nonsense of the honours list the' better. It is now just the subject of hilarious cynicism.


I see nodding beside the hon. Member for Handsworth, as always, the hon. Member for Bolsover (Mr. Skinner). Of course, I would never leave the hon. Member for Bolsover out of a discussion on republicanism. He said on the same occasion:
In a way, her peerage will assist in driving another nail into the coffin of the Lords, which will greatly please me.
I am glad to see that the Prime Minister has for once managed to please the hon. Member for Bolsover, and I am sure that the whole House will share my pleasure at his reaction.
But republicanism is not just a subject for light humour or even for serious humour, if there can be such a thing. We must recognise it and the threat which it represents to the country and to our institutions. At least the hon. Member for Fife, Central is open about being a republican. I have permission to quote from a letter that he sent some few months ago to a constituent of my hon. Friend the Member for Bristol, West (Mr. Cooke), in which he said:

"I do not believe the Queen and her family are our 'greatest asset'—on the contrary, I regard them as amongst the most greedy parasites on earth."

It is with those thoughts in mind that I suggest the House should take advantage of this opportunity to give the republicans amongst us an opportunity to stand up and to be counted. I do not necesarily invite my hon. Friends who are not republicans to go into the Lobby against the Bill, but I hope that I shall find someone of like mind so as to contrive a Division. I hope, then, that the hon. Member for Handsworth will take into the Lobby with him, if he feels that he can still vote for this doubtful measure, all of his hon. Friends who are prepared to nail their colours to the republican mast so that we and the country may know who they are.

Question put pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at Commencement of Public Business):—

The House divided: Ayes 120, Noes 162.

Division No. 36.]
AYES
[4.3 p.m.


Allaun, Frank
Graham, Ted
Reid, George


Ashton, Joe
Hamilton, James (Bothwell)
Richardson, Miss Jo


Atkins, Ronald (Preston, N.)
Harrison, Walter (Wakefield)
Rodgers, George (Chorley)


Atkinson, Norman
Hatton, Frank
Rooker, J. W.


Bates, Alf
Henderson,Douglas (Ab'rd'nsh're,E)
Rose, Paul B.


Bennett, Andrew F. (Stockport, N.)
Hooson, Emlyn
Ross, Stephen (Isle of Wight)


Bidwell, Sydney
Howells, Geraint (Cardigan)
Sedgemore, Bryan


Blenkinsop, Arthur
Hughes, Roy (Newport)
Selby, Harry


Booth, Albert
Jeger, Mrs. Lena
Sheldon, Robert (Ashton-under-Lyne)


Brown, Hugh D. (Glasgow, Provan)
Jones, Barry (Flint, E.)
Sillars, James


Butler,Mrs.Joyce (H'gey,WoodGreen)
Jones, Gwynoro (Carmarthen)
Silverman, Julius


Callaghan, Jim (M1'dd'ton s Pr'wich)
Jones, Alec (Rhondda)
Skinner, Dennis


Carter, Ray
Kerr, Russell
Smith, Cyril (Rochdale)


Clemitson, Ivor
Kilroy-Silk, Robert
Smith, John (Lanarkshire, N.)


Cocks, Michael
Kinnock, Neil
Snape, Peter


Cohen, Stanley
Lambie, David
Spriggs, Leslie


Colquhoun, Mrs. M. W
Latham, Arthur (CityofW'minsterP'ton)
Stallard, A. W.


Concannon,J. D.
Lee, John
Stewart, Donald (Western Isles)


Cook, Robert F. (Edlinburgh, C.)
Lewis, Arthur (Newham, N.)
Stoddart, David (Swindon)


Craigen, J. M. (G'glow, Maryhill)
Lipton, Marcus
Stott, Roger


Davidson, Arthur
Lyons, Edward (Bradford, W.)
Swain, Thomas


Davies, Bryan (Enfield, N.)
McCartney, Hugh
Taverne, Dick


Davis, Clinton, (Hackney, C.)
MacCormack, Iain
Thomas, D. E. (Merioneth)


Dean, Joseph (Leeds, W.)
McElhone, Frank
Tierney, Sydney


Doig, Peter
McMillan, Tom (Glasgow, C.)
Torney, Tom


Dormand, J. D.
Madden, M. O. F.
Tyler, Paul


Douglas-Mann, Bruce
Magee, Bryan
Wainwright, Edwin (Dearne Valley)


Duffy, A. E. P.
Mallalieu, J. P. W.
Walker, Terry (Kingswood)


Eadie, Alex
Marks, Kenneth
Watkins, David


Edge, Geoff
Marquand, David
Watt, Hamish


Edwards, Robert (W'hampton, S.E.)
Mikardo, Ian
White, James


Ellis, John (Brigg &amp; Scunthorpe)
Miller, Dr. M. S. (E. Kilbride)
Wigley, Dafydd (Caernarvon)


English, Michael
Milne, Edward
Wilson, Gordon (Dundee, E.)


Evans, Fred (Caerphilly)
Mitchell, R. C. (S'hampton, Itchen)
Winstanley, Dr. Michael


Evans, Ioan (Aberdare)
Newens, Stanley (Harlow)
Wise, Mrs. Audrey


Evans, John (Newton)
Palmer, Arthur
Woodall, Alec


Ewing,Mrs.Winifred (Moray&amp;Nairn)
Pardoe, John
Young, David (Bolton, E.)


Flannery, Martin
Park, George (Coventry, N.E.)



Fletcher, Ted (Darlington)
Pavitt, Laurie
TELLERS FOR THE AYES:


Garrett, John (Norwich, S.)
Price, William (Rugby)
Mr. Bob Cyer and


Garrett, W. E. (Wallsend)
Radice, Giles
Mr. Stan Thorne.


George, Bruce






NOES


Adley, Robert
Hamilton, Michael (Salisbury)
Oppenheim, Mrs. Sally


Aitken, Jonathan
Hampson, Dr. Keith
Page, Rt. Hn. Graham (Crosby)


Allason, James (Hemel Hempstead)
Harvie Anderson, Rt. Hn. Miss
Page, John (Harrow, W.)


Atkins,Rt.Hn.Humphrey (Spelthorne)
Hastings, Stephen
Parkinson, Cecil (Hertfordshire, S.)


Awdry, Daniel
Havers, Sir Michael
Pink, R. Bonner


Baker, Kenneth
Hawkins. Paul
Price, David (Eastleigh)


Balniel, Rt. Hn. Lord
Hayhoe, Barney
Prior, Rt. Hn. James


Banks, Robert
Henderson, Barry (Dunbartonshire, E.)
Pym, Rt. Hn. Francis


Bennett, Sir Frederic (Torbay)
Higgins, Terence
Raison, Timothy


Berry, Hon. Anthony
Howell, David (Guildford)
Rathbone, Tim


Biffen, John
Howell, Ralph (Norfolk, North)
Redmond, Robert


Biggs-Davison, John
Hurd. Douglas
Rees, Peter (Dover &amp; Deal)


Blaker, Peter
Hutchison, Michael Clark
Renton,Rt.Hn.SirDavid(H't'gd'ns're)


Boardman, Tom (Leicester, S.)
Irvine, Bryant Godman (Rye)
Renton, R. T. (Mid-Sussex)


Body, Richard
James, David
Rldsdale, Julian


Boscawen, Hon. Robert
Jenkln.Rt.Hn.P. (R'dgeW'std&amp;W'fd)
Rifklnd, Malcolm


Boyson, Dr. Rhodes (Brent, N.)
Toby
Rippon, Rt. Hn. Geoffrey


Bray, Ronald
Jopling, Michael
Rodgers, Sir John (Sevenoaks)


Buchanan-Smith, Alick
Kellett-Bowman. Mrs. Elaine
Rossi, Hugh (Hornsey)


Budgen, Nick
Kershaw, Anthony
Rost, Peter (Derbyshire, S.-E.)


Chalker, Mrs. Lynda
King, Tom (Bridgwater)
Royle, Sir Anthony


Clarke, Kenneth (Rushcliffe)
Kirk, Peter
Shaw, Giles (Pudsey)


Cope, John
Kitson, Sir Timothy
Shaw, Michael (Scarborough)


Cormack, Patrick
Knight, Mrs. Jill
Silvester, Fred


Costaln, A. P.
Langford-Holt, Sir John
Sims, Roger


Critchley, Julian
Latham, Michael (Melton)
Sinclair, Sir George


Crouch, David
Lawson, Nigel (Blaby)
Skeet, T. H. H.


Davies, Rt. Hn. John (Knutsford)
Le Marchant, Spencer
Spicer, Jim (Dorset, W.)


Dean, Paul (Somerset, N.)
Lewis, Kenneth (Rtland &amp; Stmford)
Spicer, Michael (Worcestershire, S.)


Douglas-Home, Rt. Hn. Sir Alec
Lloyd, Ian (Havant &amp; Waterloo)
Sproat, lain


du Cann, Rt. Hn. Edward
Loveridge, John
Stanbrook, Ivor


Durant, Tony
Luce, Richard
Steen, Anthony (L'pool, Wavertree)


Dykes, Hugh
MacArthur, Ian
Tapsell, Peter


Edwards, Nicholas (Pembroke)
McCrindle, R. A
Taylor, Edward M. (Glgow, C'cart)


Elliott, Sir William
Macfarlane, Neil
Taylor, Robert (Croydon, N.W.)


Eyre, Reginald
McLaren, Martin
Tebbit, Norman


Falrgrleve, Russell
McNair-Wilson, Michael (Newbury)
Townsend, C. D.


Farr, John
Marshall, Michael (Arundel)
Vaughan, Dr. Gerard


Fenner, Mrs. Peggy
Marten, Neil
Viggers, Peter


Finsberg, Geoffrey
Mather, Carol
Waddington, David


Fisher, Sir Nigel
Maudling, Rt. Hn. Reginald
Wainwright, Richard (Colne Valley)


Fletcher-Cooke, Charles
Mawby, Ray
Wakeham, John


Fookes, Miss Janet
Meyer, Sir Anthony
Walker, Rt. Hn. Peter (Worcester)


Fraser,Rt.Hn.Hugh (St'fford&amp;Stone)
Miller, Hal (B'grove &amp; R'ditch)
Walker-Smith, Rt. Hn. Sir Derek


Freud, Clement
Mills, Peter
Wall, Patrick


Gardiner, George (Reigate&amp;Banstead)
Moate, Roger
Walters, Dennis


Gilmour, Rt.Hn. Ian (Ch'sh'&amp;Amsh'm)
Moore, J. E. M. (Croydon, C.)
Weatherill, Bernard


Gilmour, Sir John (Fife, E.)
More, Jasper (Ludlow)
Whltelaw, Rt. Hn. William


Glyn, Dr. Alan
Morgan-Giles, Rear-Adm.
Wiggin, Jerry


Godber, Rt. Hn. Joseph
Morrison, Peter (City of Chester)
Winterton, Nicholas


Goodhart, Philip
Mudd, David
Young, Sir George (Ealing, Acton)


Goodhew, Victor
Neave, Airey



Gow, Ian (Eastbourne)
Neubert, Michael
TELLERS FOR THE NOES


Gray, Hamish
Normanton, Tom
Mr. Robert Cooke and


Griffiths, Eldon (Bury St. Edmunds)
Nott, John
Mr. Cranley Onslow.


Grylls, Michael

EUROPE

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Thomas Cox.]

4.11 p.m.

The Secretary of State for Foreign and Commonwealth Affairs (Mr. James Callaghan): I welcome this debate. I think that it will be a chance for me not only to state the position which the Government have taken up but to listen to the views of the House, because it is very important that in the difficult months that lie ahead I should be sustained by most of the House—indeed, by a critical House and, I hope, by an informed House. f shall, therefore, begin by discussing the role of Parliament, where it stands in this matter, where it should stand, and what is the rightful place that we should ask it to assume.
First, a number of changes have already been announced but may not have engaged the attention of every hon. Member. There are to be more debates on the subject both of the renegotiation itself and of the European Economic Community's progress in general, naturally according to the wishes of the House as to when they should take place.
Secondly, there is to be a slot at Question Time in which Questions will be able to be addressed specifically to Ministers on this matter. I understand that the first of these slots will be on 26th June.
Thirdly, I have assumed the responsibility of making a prior announcement in the House of the forthcoming business of the Community and of the Commission in the month ahead, so that, subject to the whims of changing business, 1 should, for example, on 26th June be able to tell the House of the business that is likely to take place in the Commission and the Community in the month of July. If I am unable to do it personally, my hon. Friend the Minister of State will assume the responsibility.
Fourthly, the Government intend to produce six-monthly reports on affairs inside the Community and the Government's attitude and reactions to them. We hope to produce the first one in the

autumn so that it will be available for debate when we return after the Summer Recess.
I am glad to see the right hon. Member for Knutsford (Mr. Davies) here because he, as Chairman, has undertaken a most responsible and important task in accounting to the House through the Scrutiny Committee which has been set up. This was announced by my right hon. Friend the Leader of the House some time ago, but perhaps I might remind the House of what the Committee's task is.
The Committee contains a number of doughty warriors on both sides who will be scrutinising the affairs of the Community. I do not think that the right hon. Member for Knutsford will have an easy time as Chairman of the Committee, and I am grateful to him for undertaking the task. I think that he and the Committee need the support of the whole House, because they will be undertaking one of the major responsibilities that this House has of scrutinising the proposals which are to be made and which would, in due course, become binding upon us.
I want to say what the Government's approach to this matter is and to make one or two comments on the work of the Committee itself. As soon as the Government receive texts from the Commission on its proposals, we shall try to transmit them to the Committee within 48 hours so that the Committee will know what it is that the Commission is proposing to do. That will be followed as quickly as possible by a memorandum, either stating the Government's view or giving information to the Committee on a purely factual basis about the nature of the proposals so that the Committee itself can take this into account when it is deciding on whether to call Ministers or persons before it. That memorandum will be the responsibility of a Minister, either my hon. Friend the Minister of State or one of the Departmental Ministers responsible for the particular business concerned.
So the Committee will have the information on which to make up its mind about whether issues are important before those issues reach the stage of decision in the Commission, and it will be for the Committee to advise the House. I hope that the House and the House authorities will give the utmost assistance


to the Committee in the matter of staffing and other requirements that it has.
Because of the lapse of time, the Committee already has a substantial backlog of proposals. I do not know how it will get through them all, but once it has overcome the backlog, although it will mean continuing hard work for the members of the Committee, it will be in a position, if it is provided with the services, to be able to report to the House on any matter that the Commission proposes to take a decision upon and that it thinks the House should know about. Obviously, there will be a number of small matters, but the Committee will, I am sure, develop its experience and will not necessarily trouble the House with them. But the principle is important if the sovereignty of this House is to be maintained in the areas in which we want to see it maintained.
As I dare say the right hon. Member for Knutsford will tell us if he catches your eye, Mr. Speaker, the Committee has recommended one of the draft decisions as an important matter for discussion by the House. It is a draft decision on guidelines for economic policy. It is not for me to speak for my right hon. Friend the Leader of the House, but there is a moral obligation on the Government to ensure that the matter is discussed. Already, since the Committee has recommended the draft decision as an important matter for discussion, my right hon. Friend the Chancellor of the Exchequer has put a heavy reserve on the subjects in the Council of Ministers so that no decision will yet be taken about it. This is the sort of way in which we should be approaching these matters. It combines common sense with a proper degree of supervision, and it may be that the Committee will want to develop its own policy and its own methods in various ways.
For myself, I am open to listen to this kind of representation, because one of the things I am determined upon is that the Commission, which is at the moment accountable to no one, shall be brought indirectly into account to the House through this kind of procedure, and it will be our fault if we do not pronounce on these issues before decisions are taken on them.
Perhaps I may say something in passing as a result of the three months' ex-

perience I have had of this subject. One of the interesting things is the way in which the Council of Ministers proceeds by consensus. Apparently, a "Luxembourg compromise" was reached as a result of President de Gaulle adopting what I think is called a blustering and hectoring attitude—language which would never pass my lips, of course. As a result, there is now an attitude that the Council of Ministers cannot reach conclusions on these matters unless there is a consensus, so our position is covered on that aspect.
We must give the right hon. Member for Knutsford all the support we can. I look to him and the Committee—both sides of it—to warn, advise and tell the House, allowing us to reach conclusions on these matters before they come up for decision. That is giving Parliament its proper place.

Mr. Neil Marten: If the Foster Committee, as we call it, decides that something should be referred to the House, can we have an assurance from the Government that no Minister at the Council of Ministers or anyone else in the Commission will finalise anything until the House has had a chance to discuss it?

Mr. Callaghan: I hope that that will normally be the case. It would be against the policy we are following that it should not be in the case. If there is an urgent matter about which we know the Council wants to take a decision in, say, a fortnight or so, the House will probably feel it would not be improper if the Minister got in touch with the Committee and said "This issue is urgent; will you please consider it urgently and tell the House whether you regard it as of importance that it should be held up or not?" Then we shall have to consider it again. It is possible to put a reserve on. That would have to be the case. We do not want to put on reserves unnecessarily on small issues that are not of particular concern.

Dr. J. Dickson Mabon: To take this a stage further, the Committee held three meetings. Its first report recommends two major debates. It would not be unreasonable to imagine that the Committee would be reporting regularly. Therefore, it would seem that the Lord President of


the Council and Leader of the House would be the man to tell whether we should have a debate once or even twice a month on these very important matters. Is that what my hon. Friend envisages, with the Lord President—that we shall hold these debates regularly once or twice a month?

Mr. Callaghan: That depends on what the Committee reports. It depends on the amount of work it gives us. If it says there are a number of issues of importance, clearly they must come before the House. The House ought to reach a conclusion on the issues before Ministers go to the Council. It will not be automatic but it should be the normal and general rule. If the House wishes to do it this way I would envisage that a lot more time will be spent on discussing these issues than has been the case so far.

Mr. Dennis Skinner: That may well be. Has my right hon. Friend had a look at the people who are represented on that Committee? Has he taken into account the factor, as I have done, that some of us can have little faith in its composition in view of the fact that it is heavily weighted pro-Common Market? If we are to pay any attention to its findings we must change its composition. We must also change the Chairman.

Mr. Callaghan: That is a matter for the House, not for me.
I know that any Committee on which my hon. Friend is not represented clearly cannot be a representative committee.
Before I spell out our attitude on renegotiation I want to make one or two further points. One matter has borne on me day after day; namely, the concern of the British people to be consulted about this issue. This was the biggest mistake made by the Leader of the Opposition during the course of the discussions and negotiations he held. He never secured the full-hearted consent of the British people in this matter. I do not know now what is the attitude of the Opposition but I should like to ask the right hon. and learned Gentleman the Member for Hexham (Mr. Rippon), who is to speak, whether he agrees that the British people should be consulted about this matter at the end of the negotiations. Does the Conservative Party believe that this issue should be put to the people, or

not? It would be valuable this afternoon if we were to have a clear indication of its view on this matter. It cannot be said too often that with this Government—

Mr. Edward Health: If the Foreign Secretary will cast his mind back to the 1970 General Election, the present Prime Minister said he would not support a referendum of the people on this matter. He did not believe the referendum was a proper constitutional device in this country. In 1971 he agreed with me, as Prime Minister, that it was not right to have a referendum.
Second, so far as the election was concerned, we made it plain that we were going to negotiate and that if we were successful in the negotiations we would put it to Parliament to carry the necessary legislation. When the right hon. Gentleman says there was no consent, there was a majority, whether he likes it or not, of 112 in this Parliament in favour of entering the Community. Those are the facts of the case.

Mr. Callaghan: It is a well-known feature of defeated generals that they always insist on fighting the last war. I have no doubt that the reminiscences of the Leader of the Opposition will appear in due course and will be fully annotated and textually correct. I am now asking a question about the future. Is it his view that the British people should be consulted at the end of the renegotiations about the result, whichever method is adopted, in whichever way it is done? If the right hon. Gentleman wishes to express his view, let us hear it, first, on the question of principle: should the British people be consulted or not?

Mr. Heath: Will the Foreign Secretary say what he wishes the British people to be consulted about? They have been consulted at a General Election about entry into the Community, and this Parliament sanctioned it by a majority of 112. Sixty-nine of his own party supported it, and 20 abstained. They are sitting on that fence. One of his distinguished colleagues, the Secretary of State for the Home Department, supported it wholeheartedly. What are the British people to be consulted about in this case?

Mr. Callaghan: The right hon. Gentleman clearly does not wish to answer the


question. I fully understand his embarrassment about it, but I promise him the question will be asked many times between now and the time when the country is again consulted. The question is very simple. This is now a period of renegotiations in the Common Market. I do not know whether they will be successful or not. I hope they will be successful, for many reasons. At the end of the day, when the conditions are known and published, does the right hon. Gentleman believe that the British people should be asked to express their view about the result as to whether we should remain in the Common Market? That is a simple question. [HON. MEMBERS: "Answer."] The answer is clear.

Mrs. Winifred 'Ewing: Mrs. Winifred 'Ewing(Moray and Nairn) rose—

Sir John Rodgers: Sir John Rodgers (Sevenoaks) rose—

Mr. Speaker: Order.

Mr. Callaghan: I fully understand that the hon. Member for Sevenoaks (Sir J. Rodgers) should be the Leader of the Opposition, but he has not got there. When he has I shall be glad to give way to him on this point.

Mrs. Winifred Ewing: Does not the Minister agree that the trouble with this question and non-answer is the word "consult" and that the whole trouble is that the British people are disillusioned about the word "consult"? They have been told that they would be consulted, with propaganda, paid for by the taxpayers, issued through the post offices. There is disillusionment. Cannot the Minister say what he means by "consult"?

Mr. Speaker: Before the Minister answers, may I say that if hon. Members wish to catch my eye later on, these interventions do not improve their chances.

Mr. Callaghan: Is that an encouragement not to give way?
The answer to the hon. Lady has been given many times. The form of consultation will take the form of a referendum, as stated by my right hon. Friend the Prime Minister, or of a General Election. We shall have to wait and see how the circumstances develop on this issue.
I am sure the Opposition want to cover the embarrassment of their Front Bench. I do not blame them for cheering. In my first speech I spelt out the major objectives in our renegotiations. In a later speech I clothed them with more detail, with the exception of European union, economic and monetary. If it is the concern of some of my hon. Friends, I shall return to these points later.
Let us see what points I covered and match them against the manifesto and the programme on which we fought the General Election. First, the election address said that there must be:
irer methods of financing the Community budget".
I said in my speech that the impact of the present system is unfair on the United Kingdom, and that the negotiation terms of entry were fundamentally inequitable. It is in the interests of every country to find a solution that takes account of the economic differences between States. If an essential requirement of our renegotiation is to be met we must ask the Community to find such a solution. I said that because our estimate is that by 1980 the net contribution of Britain to the Community will be between 700 million and 800 million units of account. The unit of account is based on the dollar, and that could mean £300 million plus, depending on the rate of exchange.

Mr. Peter Kirk: With great respect, the unit of account is the exchange rate for the old dollar at $280 to the pound.

Mr. Callaghan: I am much obliged to the hon. Gentleman, but he will find that it still comes out at about £300 million.
The basic principle on which we insist in these negotiations is that it is not right that resources should be transferred from the less well off to the better off in the Community. At this stage in the Community's development, the Government are not asking that net resources should be transferred from the better off countries to the less well off countries, but we are certainly not intending to accept the reverse; namely, that there should be a net transfer from the less well off to the better off countries. That is what is happening. Whether the exchange rate is $280, $2.40 or $2.20 to the pound, the result is the same. There will be a net


transfer to countries which are better off than ourselves. That is a fundamentally inequitable position. It is one that was accepted, but we cannot accept it now. It has to be renegotiated.
Now I turn to the common agricultural policy. What did we say in the election address? We said:
Major changes in the common agricultural policy, so that it ceases to be a threat to world trade … and so that low-cost producers outside Europe can continue to have access to the British food market.
Let us watch prices. Let us see where they are. If the right hon. Gentleman thinks that prices will remain at their present level I shall be surprised.
I said that criticism of the CAP has been particularly strong in Britain both because we are a large importer of food and because membership of the EEC has weakened our ties with traditional suppliers. The major areas in which the United Kingdom wishes to secure improvements are in the cost of the CAP, which should be reduced in real terms, and there should be speedy improvements in the marketing regimes for some major commodities. It does not make sense to take a large quantity of British beef off the market, freeze it, put it in store and then watch the price of the remainder go up, to be followed in turn by a reduction in the amount the housewife buys. Those were the simple unadulterated truths that I was trying to utter to the Council of Ministers last week.
The changes we propose would do much to ensure that the CAP is not an instrument of excessive protectionism or a threat to world trade. There is a strong case for improved terms of access for many kinds of foodstuffs from countries outside the Community. We need satisfactory and continuing arrangements with New Zealand, and I spelt them out.
As regards sugar, we remain firmly committed to the offer of access on fair terms to 1.4 million tons of sugar from the developing countries of the Commonwealth after the Commonwealth Sugar Agreement expires. It is our view that everything I have suggested is compatible with the basic principles of the CAP and with the treaties.
Let us match that against the words of the manifesto. Is there any disagreement or quarrel? Is there anything wrong with it?

Mr. Churchill: Mr. Churchill (Stretford) rose—

Mr. Callaghan: I do not think criticism is coming from the hon. Gentleman but from another quarter.
Let us see what we said in the election address. We said:
The economic interests of the Commonwealth and the developing countries must be better safeguarded.
That is partly dealt with, and my right hon. Friend the Minister of Agriculture, Fisheries and Food will be dealing with it in the Agricultural Council.
Apart from those major changes that affect Commonwealth countries, what else? I called for an extension of tariff quotas for a small number of products of importance, for example, some canned foods. Then, as a permanent solution in the forthcoming multilateral trade negotiations we could include an offer to make substantial reductions of tariffs on these products as well as on certain industrial products of importance to those countries.
As regards the developing countries in the Commonwealth, attention is concentrated at present on the group known as the associable countries or ACP countries —African, Caribbean and Pacific States. Negotiations have been going on between them and the Community for some time to make a new agreement. There is likely to be later next month a meeting of Ministers of the Community and the ACP countries in which we shall certainly take part. What I call for is the need for free entry for their industrial products and the need for generous treatment for their agricultural products, including, if necessary, tariffs on levy-free quotas. There is a need for evolution of Community burdens of aid. That view has already been put forward in the Development Council by my right hon. Friend the Minister of Overseas Development. We need to take into account all the developing countries, not just the ACP countries, and to have a more balanced distribution of trade on a world basis.
For the countries of South Asia we need to improve the Community's generalised preference scheme and to implement the Declaration of Intent. We need special regimes for Bangladesh and India in respect of jute and coir.
I ask any hon. Member who wishes to criticise whether he thinks that list


matches up to safeguarding the economic interests of the Commonwealth and developing countries.

Mr. Churchill: The right hon. Gentleman referred to the Labour Party's election manifesto, which contained the words—
low-cost food producers outside Europe".
Will he name two or three of them?

Mr. Callaghan: No, sir, because they do not exist. Time marches on, a factor which we take into account even if the Leader of the Opposition does not recognise it. As the result of the combination of drought and bad harvests world prices have moved up.

Mr. Richard Body: Mr. Richard Body (Holland with Boston)rose—

Mr. Callaghan: Let me deal first with the hon. Member for Stretford (Mr. Churchill). It would be foolish and shortsighted for the Opposition or anyone else to assume that world prices will always remain at their present level. On the other hand, we shall not have a continuation of droughts and bad harvests. In that case the difference between world prices and Community prices will become more important.
We should not try to shelter behind droughts and high prices. The principle to be followed is that there should be alteration in the regime and structure of the Community along the lines.I indicated earlier. In that way, whether world prices are high or low, we should avoid excessive protectionism in the Community and benefit the consumer as well as the producer. That is what we are trying to do, and those are the changes that should be made in the CAP.
I come now to regional and industrial policy. The election address referred to:
The retention by Parliament of those powers over the British economy needed to pursue effective regional, industrial and fiscal policies.
What did I ask? I said that we required powers to be able to pursue effective regional and industrial policies. We recognise the value of rules within the Community to ensure that one country in attempting to solve its own problems does not create problems for the others. We

fear that our plans for British industry, including the steel industry, may be hampered by unduly restrictive interpretations of the treaties, and as part of the renegotiation we shall seek assurances on this score.
I turn to regional aid—and I am summarising what I said on all these matters. We said that the co-ordination of rules on regional aid had a useful part to play. The rules must be broad enough in scope to cover all types of aid that may be required. It will be necessary from time to time, arising out of our past experience in this country, for us to vary the level of aid and the definition of areas where particular problems arise, such as steel closures. We may also need to exceed whatever ceilings are agreed. These matters are essential to us as an element of the renegotiation.
That is the situation on those issues. 1 ask any hon. Member who cares to do so to get up and say whether that is inconsistent with the policy put forward by the Labour Party at its annual conference and by that party at the General Election, the party for which the people of this country voted.

Mr. Norman Atkinson: Mr. Norman Atkinson (Tottenham) rose—

Mr. Ronald Atkins: Mr. Ronald Atkins (Preston, North) rose—

Mr. Callaghan: Before I give way, may I ask whether either of my hon. Friends is seeking to raise the question of capital movements or harmonisation of VAT or issues of that sort? I said that I should come back to those matters.

Mr. Atkinson: And the treaty?

Mr. Callaghan: I shall come back to that.

Mr. Atkins: I thought that my right hon. Friend had given me my cue. He is now trying to take it away again. Why did he say so little about the sovereignty of the British Parliament, which has always been a matter of importance for the Labour Party?

Mr. Callaghan: I thought I began my speech by outlining a series of proposals, which were challenged only on the ground of composition of the Committee and not


because of the way in which these matters were to be carried out. To look at these matters fairly—I say this to all those who do not want to get out of the Common Market at any price—it is up to the House to probe them. By using the procedure and arrangements laid down by the Lord President, the House can take control of these matters. [Interruption.] I shall be very surprised if I am now to be told that that warrior, my right hon. Friend the Member for Battersea, North (Mr. Jay), has finally deserted and has given up his position on the Committee and has been "bought" and tainted.

Mr. Douglas Jay: Can my right hon. Friend answer one simple question? Does he stand by everything he said in his speech on 1st April?

Mr. Callaghan: Yes. Certainly there is no contradiction between the two matters, except in the minds of commentators. I fear that some hon. Members and some members of the public are more concerned with the headlines than they are with the content. I have gone through the content and I defy anybody to point out to me where there is any difference between the two.
One of the difficulties—this is a matter to which the Community should turn its attention—is that the Press does not attend the meetings. All that happens is that after the meeting one is asked about these matters in the lift and one tries to give an impression of what has gone on during the brief journey from the thirteenth floor down to the ground floor. That is no way to report these matters. I see the difficulties, but I ask commentators to study the text.
I turn to the question of how this work is to be carried out. First, as regards the common agricultural policy my right hon. Friend the Minister of Agriculture will be taking on board these important changes and will be handling these matters in the Agricultural Council. As regards trade and the negotiations with the Protocol 22 countries, those matters will be dealt with in the Council of Ministers. The question of aid will be dealt with in the Development Council by my right hon. Friend the Minister of Overseas Development. She is to attend a meeting on Thursday. Regional assistance and the

rules in regard to regional aid will be dealt with in the working party which has already been set up and which is now beginning to move ahead. All those issues will be brought together in the months ahead as the procedure goes through.
There is one matter which I should mention, and that is the budget. I have already said that this arrangement is inequitable. Because the Council proceeds on a consensus, it would have been possible for an amendment to be tabled to stop any reconsideration of this matter. But that reconsideration was not stopped. The Commission has been asked to make an inventory of what has been happening to Community finances in the past and also to look ahead to Community finances between now and 1980. It will report back on the facts as it finds them and the Council of Ministers will discuss this matter to see what solution can be arrived at. I do not know whether we shall get a solution. I do not know whether a veto will be imposed. All that has happened so far is that we have made a minor piece of procedural progress which is worth while. The Commission has not said "No". It has not said "Yes", either, and there is no euphoria on my part in terms of the tough months of negotiation that lie ahead.
The only thing that could wreck proper consideration would be the prospect of the Tories being returned to power at a General Election, when these matters would be quietly forgotten. The Conservatives are regarded in Europe as a soft touch. Anybody can get anything they like out of that lot on the Conservative benches. If there is an incentive to the British people to ensure and stabilise the support of the Labour Government, then this is it.
I promised that I would deal with one or two other matters. I refer first to the harmonisation of VAT, which has caused concern among some hon. Gentlemen. The first stage is under discussion in the Community and there are draft proposals about coverage. We take the line that provided the Community accepts zero rating for food and other items, we would consider favourably the harmonisation of coverage. I must say that no agreement is yet in sight and there are no proposals for harmonisation of rates. I have no intention of yielding on the point relating to zero rating. It is not conceivable and


would not be in accord with what we said in our manifesto which was carried into our election programme. That is the position on harmonisation. The proposals have been put forward and we are not yielding on the matter of zero rating for particular items. I hope that the situation is covered for the moment.
It may have escaped the attention of some of my hon. Friends and others that the question of capital movements was covered by my right hon. Friend the Chancellor of the Exchequer in his Budget speech on 26th March. My right hon. Friend said that he had altered the arrangements for investment in the European Economic Community. Arrangements had been made in the 1972 Budget under which firms were able to obtain a ration of £1 million of official exchange for a project in any one year. My right hon. Friend altered that situation. He said that
for the time being such investment must be financed, in the main, without official exchange. The existing rules for investment in the non-sterling area will therefore apply to the EEC also. We have informed the Commission of the European Communities and the other EEC Members of what we are doing. "—[OFFICIAL REPORT, 26th March 1974; Vol. 871, c. 287.]
Articles 109 and 108 both provide for action of this kind to be taken. The Chancellor took such action and it has been discussed in the Commission. Therefore, in terms of capital movements, in so far as we are dealing with either direct or indirect investment, there need be no concern. If the reference is to the flows of oil moneys which are now saturating the markets and overflowing all our boundaries, nobody has yet found an answer how to control that situation. That is one of the big problems that face us at present.

Mr. Atkinson: I do not want unnecessarily to delay my right hon. Friend, but he will appreciate that in this debate we shall be taking up many of the points which he is now making. One of the points relates to the flow of capital. Does he not accept that the Treasury has already indicated that the arrangements announced by the Chancellor of the Exchequer come to an end at the end of December this year? This has been confirmed by Conservative Members who attend meetings in Europe.

But there are other difficulties, underlined by the fact that my right hon. Friend said that the Labour Government had no intention of amending the treaty. This is an important matter, which we are now discussing.

Mr. Callaghan: It seems to me that my hon. Friend is making his speech now. What we said on the matter of capital movements is set out in the manifesto:
We need an agreement on capital movements which protects our balance of payments.
I imagine that my hon. Friend does not assume that our balance of payments will be in balance by the end of the year. If they are not, I can assure him now that there will be no likelihood of these restrictions being lifted.

Mr. Atkinson: We do not yet know the Commission's conditions.

Mr. Callaghan: We do not know the Commission's conditions because we do not need to know them. We inform the Commission of what is required under our balance of payments situation and what we shall do under Articles 109 and 108. There can be no doubt about that, and that will remain the position. I hope that my hon. Friend will look at the matter fairly and not raise scares which do not exist. When a country is in balance of payments deficit to the extent that we are, there is no doubt of its powers to restrict flows. That is a power that we require. It is a power that my right hon. Friend the Chancellor of the Exchequer has taken without challenge. It is a power that he will continue to have.

Mr. Atkinson: Does not my right hon. Friend accept that it is within the Commission's power to issue directives on the terms under which we would then manage our economy in these circumstances, and that, when the Opposition join in the debate, they will contradict some of the things that my right hon. Friend has said?

Mr. Callaghan: I do not accept that. What I am ensuring is that the procedure does not go ahead in this way. I do not accept the fears that my hon. Friend expresses.
I turn now to some more general reflections. It is true that we do not propose


to renegotiate the treaties. We did not say that we would. This was not a hare raised by us. It will not be found in the Labour Party manifesto, and it is that that I clutch to my heart, whatever anyone else may say. I can promise the House that I know this section of it better than anyone else in this Parliament, and I shall continue to adhere to it.
We are not renegotiating the treaties. When I started out on this road, I thought that we might have to. I thought that it would be necessary to propose some amendments. To cover myself and some of my more sceptical right hon. and hon. Friends, I put in a reservation saying that I might have to propose some alterations to the treaties. It stands in my second speech. I said that the basic document was that of 1st April, 1974. That is the basic document in which we say that I may have to propose changes in the treaties. But why should we go out of our way to make trouble if our objective can be secured without it? I have never believed in making trouble for anyone. I am the mildest and most conciliatory of Members when dealing with these issues.
If we have to renegotiate, why should we adopt a process requiring the ratification of nine Parliaments, including our own, with all the prospects which might ensue, if it can be done without? [An HON. MEMBER: "Let us just get out." I must rebuke my hon. Friend. He is a worthy upholder of party policy. He would not have me depart one inch from it. He knows the party policy, and I shall stick to it.
I turn to some further general reflections on the issue, and the first of them relates to the Commonwealth. When we debated these issue in 1970 and 1971, we said that the result of entry into the Community would be to weaken the links with the Commonwealth. That has happened. There is no doubt that, as a result of our entry, the Commonwealth has succeeded in diversifying its markets. It has found different markets, and it is for that reason, among others, that New Zealand for example has not been able to deliver her full quotas to this country— —

Mr. Edward Milne: Before my right hon. Friend leaves the Commonwealth—

Mr. Callaghan: I have not yet finished with the Commonwealth. I will strike a bargain with the hon. Gentleman. If he is willing to wait until I have completed what I have to say about the Commonwealth and I have not dealt with the matter that he wishes to raise, I shall gladly give way to him then.
I have endeavoured to consult all the members of the Commonwealth on this. We have sent out telegrams and messages, and we have their reactions. A number of members of the Commonwealth feel that the spread of diversification has gone so far that not much can be pulled back. Others have ties of blood, sentiment and history with us and would like to see a pulling back if it could be secured. Others, frankly, are more concerned to see their relations with the Community broadened than to keep a market with Britain.
All these factors have moved on since we discussed these issues in 1970. I regret that the Commonwealth has diversified in this way—[HON. MEMBERS: "Why?"]—but we forecast that it would.
I am asked why I regret the diversification. I regret it because I believe that the Commonwealth is a force for good and that its ties should be maintained as closely as possible. Since being at the Foreign Office, I have tried and I shall continue to try to strengthen the ties with Commonwealth countries.

Mr. Milne: My right hon. Friend has made precisely the point about which I wanted to ask him. If it is possible to renegotiate with the Community in the way that he has outlined, despite the changes in Commonwealth trading arrangements, it is equally possible surely to renegotiate these matters with the Commonwealth. The purpose of renegotiation is on that basis.

Mr. Callaghan: Yes, it is possible. We are discussing with the Commonwealth countries, and we will continue to do so, whether they are willing to re-enter into long-term arrangements with us or with the Community as a whole, and at what level of prices they will be willing to do so. That is an essential part of our discussions.
As to whether the views of the Commonwealth have been properly repre-


sented and as to whether I have done the job that I was given, I make one quotation in my own defence:
The New Zealand Prime Minister Mr. Norman Kirk said … he was pleased that Britain was seeking satisfactory 'continuous' arrangements for New Zealand trade with Europe. Commenting on the statement made by the British Foreign Secretary, Mr. James Callaghan, in Luxembourg "—
that is the speech—
on the renegotiating of British terms of accession, Mr. Kirk said it was the first time that New Zealand's case had been put so clearly and emphatically. 'It was all the more emphatic because it was coupled with renegotiation'.
So he is in no doubt, and Mr. Chirac is in no doubt—

Mr. Raphael Tuck: He is.

Mr. Callaghan: He is in no doubt about the fundamental questions that we are raising and about the difficulties that we shall find.

Mr. Raphael Tuck: May I raise with my right hon. Friend one matter which has been worrying many of us? Mr. Chirac said on 5th June that the French regarded the common agricultural policy, which my right hon. Friend wishes to renegotiate, as "untouchable". What answer has my right hon. Friend to that?

Mr. Callaghan: My right hon. Friend the Minister of Agriculture has already altered the basis of the CAP by what happened within a month of going back. The Italians themselves put on import deposits on agricultural produce. I do not rejoice in any of this because it means that there could be nationalist solutions for problems stretching over a wider area.
I say to my hon. Friend the Member for Watford (Mr. Tuck) that if the political will is there, we can get these changes. If the political will is not there, we cannot get them. That is what the party said that we should set out to try to find. At the end of my voyage of exploration, I do not know the answer with which I shall come back. But it will be a fair answer, because I shall not say one thing to the Council of Ministers and another thing to my right hon. and hon. Friends. My hon. Friends think that I never budge. They should hear what I say to the Council of Ministers. We must

be absolutely honest and straight about this matter. There is nothing that I have said this afternoon that has not been said in another place.
Finally, I return to the point made by my hon. Friend the Member for Watford. We have a new President in France— President Giscard D'Estaing. We also have a new Chancellor in Germany— Chancellor Schmidt. They are new men. I believe that there is a growing realism about what is possible. The phrase-making of the last few years—the kind of words that went into such phrases as "European Union" and so on—will be abandoned. The people will begin to try to find practical solutions to common problems. Heaven knows, there are enough of them—problems of inflation, monetary markets, Euro-Arab dialogue, United States-European relations, and relations between Europe and the USSR. Canada is asking for discussions with the Community. Yesterday, in the Council of Ministers, I was able to ask that they should examine their own records in relation to sanctions against Rhodesia in order that we may try to get some common approach on them and to make sure that the sanctions are uniformly applied, especially in view of the developments taking place in Southern Africa. In all these issues it is important that we should regulate our relations with Europe.
The Government are working for successful renegotiations. We are not working to fail. I do not know whether we shall succeed. I have never made a secret about that. I do not know with what answer we shall eventually return. I believe that it would be in European interests if we succeeded. It would be in our interests if we succeeded. If we cannot succeed we shall have a hard decision to take and the British people will have to be put fully in the picture about it. I believe that it is on this basis that we must conduct the whole of our discussions.
It would be a great blow to Europe if we were unsuccessful. As to whether it would be a blow for us economically, that is a dubious question. I am not wholly convinced about that. Politically, however, it would be a blow for Europe as well as our relations with Europe. It is in that political sense that it is probably


as important to work for success as it is in the economic sense. As my right hon. Friend the Secretary of State for Trade pointed out yesterday, the financial benefits of our trade last year have not been clear to be seen so far. We shall have to see how that matter goes. As to the small change of gossip—as to whether they want us out, and the reports of anger, and hopes that we leave, and so on—we can dismiss all of them.
There are big issues at stake and big prizes to be won. I do not know whether we can succeed. We shall do our best. But, on the basis of the negotiations conducted so far, if anyone were to vote against the basis on which we started them, he must be either deaf or just plain cussed. We have been putting our position very fully and clearly. We have stood by what we said we shall do and we have continued to do that. If we succeed we shall do what, in our manifesto, we said we would do—namely, join in building a new and a wider Europe.

5.3 p.m.

Mr. Geoffrey Rippon: The Foreign Secretary's speech at Luxembourg was generally recognised as constructive and statesmanlike. I am afraid that there were times this afternoon when his performance was not exactly what one would expect of a Foreign Secretary reporting to Parliament. We, as a House, ought to take note that there are grave dangers in entangling weighty issues of foreign policy in party-political disputes of the kind with which the Foreign Secretary was manifestly dealing this afternoon.
The Foreign Secretary asked to be sustained by the House in his negotiations. I assure him that he will be, provided that he makes it clear at every stage of the negotiations that what he is concerned with is the defence of British interests and Commonwealth interests, and not simply party interests.
I think that the whole House will, however, be grateful to the Foreign Secretary for what he told us about the arrangements that the Government propose for debates. Questions and reports. In that regard, he is following the procedures which the previous Conservative Government introduced and contemplated for the future. We would also all want to pay a warm tribute to what we may collo

quially call on this occasion the Foster Committee.
What the Foreign Secretary made clear was that there already exist the safeguards for Parliament that we always said were there throughout the long discussions on the European Communities Act. We said then that arrangements could be made for ensuring that Parliament would know about and could express opinion on any matters that came before the Commission or the Council of Ministers and could express a view before final decisions were taken. It is rather extraordinary, after all those long debates, to hear the Foreign Secretary saying that he has now discovered the Luxembourg Agreement and can assure the House that sovereignty is not an issue in this regard. One of his hon. Friends intervened to say that what we are concerned about is the sovereignty of Parliament. That is really relevant to the question of consultation with the people.
In our election manifesto in 1970, in which we said that we had a commitment to negotiate, no more, no less, we said that after the negotiations, provided that we were satisfied that the terms negotiated were fair, we would put them to Parliament. It is interesting that at that stage—whether there was a Labour Government or a Conservative Government—the present Prime Minister, whether as Prime Minister or Leader of the Opposition, always said then that Parliament was the proper forum for these discussions and that he was against even a consultative referendum and would hold to that view no matter if there were even 20 public opinion polls against him. In the result we had a majority of 112 in the previous Parliament in favour of entry on the terms then negotiated, and 69 members of the Labour Party voted on that basis, including two members of the present Cabinet.
Now the Foreign Secretary says "What of the future?". The consultation with the people through Parliament must be a continuous process. It is not sufficient to have just one consultation about one stage in the negotiations. The Foreign Secretary would not say whether there was to be a referendum or a General Election. He said that we should wait and see how the situation developed. That was probably the best answer that anyone could give, because it is the Government who


will have to come forward at the appropriate stage and say what they think should be done. We are probably closer to a bipartisan view of this matter than we have been for a very long time. Perhaps we shall be all agreed on what to do and there will be a unanimous recommendation to the British people. But in any event, this particular matter on the form of consultation with the British people through Parliament continuously is a matter which we shall no doubt debate further.
When the Government have made up their minds whether they are to consult through a General Election, in the more conventional way, or through a referendum, they will have to tell Parliament what sort of legislation they contemplate. We shall have to consider, as the Prime Minister always said that we should have to consider, the constitutional implications of importing the referendum into our constitution and the effect that it would have on the sovereignty of Parliament. The Italians have referenda, but not for taxes or treaties. The French have a referenda system because the President said that being directly elected he had the right to consult people over the heads of the French Parliament. We shall have to consider this matter. What sort of questions would be covered? Would the Foreign Secretary say that the British people ought to be consulted about nationalisation or about capital punishment, or a whole range of other issues? We would have to consider the matter, and it is for the Government to make proposals about the way in which questions to the people must be put.
For our part, we on the Opposition side of the House have always made it clear that we stand for the sovereignty of Parliament and that, I hope, must always be sustained by consultation in the appropriate way with the electorate.

Dr. Mabon: I do not understand the right hon. and learned Gentleman's last remark. If the Conservative Party—it is a perfectly respectable position to take— by saying that it respects the sovereignty of Parliament, means that it does not believe in referenda, does that mean that there would be opposition from the Conservative Party to a referenda Bill produced by the Government?

Mr. Rippon: We must await the Government's proposals. This matter raises very serious constitutional issues, which have been recognised on both sides of the House and were the subject of debate and a vote in the previous Parliament. But one Parliament cannot bind another. Equally, no referendum could be final and binding, and if it was consultative the final decision would rest with Parliament. The sovereignty of Parliament rests upon the will of the people and the expression of that from time to time in a General Election. If we import some new concept into our constitution we shall have to discuss it very carefully in the House. We can only do it, as the Foreign Secretary said, if we wait and see how circumstances develop. At present, the chances are that things may go very well, if the right hon. Gentleman sticks to the views he expressed in Luxembourg last week.
The Government's attitude, as far as one can now judge, can be put simply. They remain in favour of the principle of entry. They want the Community to succeed, to grow and to develop, but they are not satisfied about some of the terms. They now say "We can negotiate within the framework of the treaties". In other words, the negotiations now in hand are exactly those that the treaties contemplated.
I find it encouraging, as there are 1,500 pages of treaties, 650 relating to the Act of Accession and the protocols and all the other documents, that the Foreign Secretary can say that he can see no reason why all that negotiation—and it took a long time- should not be left intact. He says that there are only four or five issues —we can ignore one which he said for the moment we could put on one side, because it was still a matter for future discussion—which represent the limits of the negotiations that he has in mind. That is a great step forward.
It is now clear that in the Government's judgment, which must be a collective view binding not only the Foreign and Commonwealth Secretary but the Secretary of State for Trade and the Secretary of State for Employment, the proposals put forward, if accepted, would not require changes in the treaties. Therefore, it is not possible to negotiate in good faith unless one is proceeding on the principles


which the House accepted when the Prime Minister spoke in the House on 8th May 1967. One cannot negotiate in good faith unless one accepts the basic principles of those treaties, because otherwise one would have to say "I believe only in withdrawal, and there are no terms which could be found acceptable."
That is a great advance in the view of some of those who took part in the debates in the last Parliament. What we are really talking about now is basically how we can ensure the implementation of the terms on which we joined. That is true even of the Community budget proposals. The Foreign and Commonwealth Secretary now says—this was perhaps his toughest point—that in respect of the Community budget the negotiated terms of entry were fundamentally inequitable, and that experience has reinforced that judgment. Quite apart from the fact that large numbers of his party voted for entry on the basis of the terms then negotiated, there is a misunderstanding of what was negotiated and what the treaty provides. Our contribution to the budget was one of the central features of the negotiations leading up to our accession. Our purpose then was to settle what was described in paragraph 43 of the Labour Government's 1970 White Paper, which referred to
the transitional arrangements under which we approach paying our full share of the recently agreed Community financing arrangements".
We were concerned that the application of those arrangements should be equitable.
We said in paragraph 91 of our own 1971 White Paper:
From the outset the Government recognised, as did their predecessors, that it would not be possible to seek to make fundamental alterations in the system of providing funds for the Community.
That is why I say that even the fresh look which it has been agreed should be taken at the Community budget, and at the burden which it imposes on individual countries, cannot be regarded as a renegotiation of the terms of entry, as those terms themselves include the very safeguards needed to take account of continually changing circumstances, whether in relation to capital movements, balance of payments or whatever.
Apart from the express provisions of Articles 6, 108 and 109 of the Treaty of

Rome, under which the late Italian Government were proceeding, provisions which relate to action that can be taken to deal with the balance of payments and similar problems, it was always understood during our own negotations that estimates of our contribution to, and receipts from, the Community budget in future years were necessarily tentative and depended on a large number of unpredictable factors.
That was a great difficulty in the conduct of the negotiations—trying to assess what the position might be even through the transitional period, let alone the years thereafter. We set out in the White Paper the nature of the difficulties that arose, and the way in which the Community budget was likely to change. In paragraph 95 we said:
it is impossible to foresee the likely size of our VAT contribution. The size of this contribution (if any), would be a function of the size of the Community budget and of aggregate receipts of levies and duties from all member countries.
We also said that there might be changes in activities as a result of industrial and regional policies. We concluded:
Thus, in the Government's view, neither our contribution to, nor our receipts from, the Community budget in the 1980s are susceptible of valid estimation at this stage.
It was for that reason that the Community declared to us during the course of the negotiations that if unacceptable situations should arise
the very survival of the Community would demand that the institutions find equitable solutions.
This arose because when I put forward our estimates as to what would happen in the future the Community representatives said "You have underestimated the benefits and exaggerated the cost. You have underestimated the receipts. This is all very difficult." They put this phrase into a Commission document, and I seized on it and said "I am prepared to agree with you that, as it is very difficult for all of us to see what the likely position will be as far ahead as the 1980s, there must be procedures to ensure equity at any point in time between one member of the Community and another, to ensure the balance of advantage."
The Foreign and Commonwealth Secretary says that experience has proved that the terms were fundamentally inequitable.


In fact, the experience of the first two years shows that the Commission was right and that we had exaggerated the burden on our balance of payments. The Financial Secretary to the Treasury said yesterday that the figure of net cost in 1974 would be £80 million. I think that it was £75 million to £80 million in 1973. But in our White Paper and in our negotiations we contemplated a 1973 net cost of £100 million and a 1974 net cost of £115 million. That was partly because we underestimated the amount we would receive from the Social Fund, which amounted to £24 million last year, or one third of the total amount available.
We also based our figures, as we could only do then, on what was our percentage of the Community's total gross domestic product, which then stood at about 19 per cent.
The idea was that we had a key by which we moved up to our full contribution, based on our notional GDP, assuming it remained the same. We had the five years' transitional arrangements and a further two years, and then we would make our full contribution. We always envisaged that as the Community developed there would be other purposes on which Community funds would be spent, such as the industrial and regional policies, from which Britain could expect to receive back money commensurate to our contribution to the Community's budget. We were not saying that there should be a just retour—that everything we put in must automatically come back out—but we said that those factors would have to be taken into consideration when we framed the budget, and that we should have a continuing British interest and concern in the size and shape of the budget.
A great deal of what the Foreign and Commonwealth Secretary says about the industrial and social policies and the size and shape of the budget is not in dispute. What we did not envisage, and what will no doubt be a matter of some dispute and discussion not only in the Community but in the House, is that the Socialist Government would suggest to the Community that by 1977 our share of the Community GDP would be about 16½ per cent., and by 1980 be 14 per cent., even after taking North Sea oil into

account—that in effect our individual standard of living would be so far below the average for the rest of the Community. Indeed, an estimate that the British GDP per head of population will decline from 80 per cent. of the Community average in about 1977 to 65 per cent. in 1980 is a savage comment on declining British prosperity.
I, for one, am not prepared easily to assume that, even supposing that the Community is prepared to agree that that is a correct figure. In effect it means that the Government are saying, "We assume in our estimate that by 1980, considering that some people will be below as well as above the average, the average British citizen will be little more than half as well off as his German or French counterpart". That is a very severe assumption.
If it were true we would be entitled to say that this was an unacceptable situation, of which the Community would have to take account in framing the budget. There may be something to be said for the solution which the Foreign Secretary put forward, of taking account in the budget of the special problems of countries which have a below-average gross domestic product per head of population. That is a fair point to make. I was glad that the Foreign Secretary made it quite clear that he was not talking about a system just for this country but that it had to be a system for the Community as a whole, applying to all members. That is the right Community approach.
It allows for the changing circumstances not only of ourselves but of other countries too. As I told the House on 25th October 1971:
The balance of advantage between the nations in those Communities is constantly changing. That is why we cannot make estimates of what the position will be, in mathematical terms, in the 1980s."—[OFFICIAL REPORT, 25th October 1971; Vol. 823, c. 1251.]
1 always stood firm by the assurance we were given by the Community that it would have regard to changing circumstances as we moved forward. The Chancellor and the Foreign Secretary can give their views about the cost of remaining within the Community but I hope that they will also give the House the cost of withdrawing. We must set the present cost of our contribution to the budget— about 06 per cent, of our total national Budget—against the undoubted benefit


of permanent unrestricted access for our exports to a market of 300 million people. That is what we have called the dynamic effect from which we would benefit. It could not be quantified because it would not take place in the early stages. That is why we had to have these transitional arrangements.

Mr. E. Fernyhough: The right hon. and learned Gentleman has spoken so many times about the "dynamic effect". When will this be witnessed by the people of this country?

Mr. Rippon: That is what I was explaining and what I have often explained in earlier debates. One of the reasons why we asked for the special transitional arrangements was that we said that whatever the dynamic benefits would be we could not make a quantitative estimate. They were quantified as being possibly equal to ½ per cent. increase in the gross domestic product, which would bring us £1,100 million a year. That does not necessarily affect the balance of payments except in so far as it is an export-led movement.
We assumed that the benefit would come later and that it would be a growing benefit. What the Foreign Secretary and the Government can do is to consult industry and ask for its views. ICI, for example, increased its exports to Europe last year by some 98 per cent. Industry can give the figures to the Government and the Government must tell us what they think of the value of the opportunities of exporting to this important and growing home market. If we were to withdraw we should have no guarantee of an offer of association on the basis of a free trade area. We could be faced with tariff barriers or quota restrictions. There is no reason to suppose that if we behaved badly the Community would necessarily be prepared to treat us as a special case, like Norway. We cannot just go back into EFTA. It has its own association arangements with the Community.
Whatever the effect on the balance of payments according to the recent report by the National Institute for Economic and Social Research none of the United Kingdom's balance of payments difficulties can be attributed to EEC membership. There is no simple answer there. If we contemplate within the Community this declining standard of living what.

then, is the Government's estimate of the position if we were to move outside it?
The Foreign Secretary spoke about consultations with the Commonwealth countries and I hope that we will hear more of that. I trust that that will be put in a document and the House will be kept fully informed as to whether the Commonwealth wants us to withdraw, to negotiate particular agreements within the framework of the treaties or whether it wants us to see that the treaties are implemented. We shall want information about the views of industry and agriculture on the developing position.
The second point emphasised by the Foreign Secretary was the common agricultural policy. No one has ever taken the view that that should remain unchanged forever. There must be here, as elsewhere, this constant process of negotiation within the treaty. This is the problem 1 find with this so-called renegotiation exercise. It assumes that it is possible to start a renegotiation within the framework of the treaty and then to reach some final solutions which will last until the 1980s. I do not believe that is possible.
The position now is as it was stated by the Prime Minister on 8th May 1967 when he said that the common agricultural policy was not negotiable. We have to come to terms with it, he said. We could only influence it if, but only if, we were inside the Community.
The whole House will be glad that the Foreign Secretary has recognised and acknowledged this. I quote from his statement in Luxembourg, when he said that:
it can provide an assurance of supplies at known prices in a world where both prices and availability can be unpredictable.
In consequence, what the Government are now proposing, in their own words, are:
actions consistent with the broad principles on which the policy is based.
That is no more than we negotiated and no more than is in the treaties which Parliament ratified by passing the European Communities Act.
As we made clear in the debate of 19th March, my right hon. Friend the Member for Grantham (Mr. Godber), when he was Minister of Agriculture, had already proposed modifications to the


Community to take account of this need for a proper return to efficient producers as well as taking account of the impact of the policy on taxpayers and consumers alike. These are complementary considerations. There is no dispute between us on that.
My right hon. Friend had emphasised to the Community the same points as the Foreign Secretary. He dealt with what we would need to discuss in our future negotiations, including action to contain the costs of the common agricultural policy and to deal with surpluses. On this question of costs, although we may have a key for our contribution, and it may be a certain percentage of the budget, there are advantages in being a net con tributor. Then we do not have the same incentives as the recipients to agree the total amount that is to be distributed. 1 have never thought that a British Government would be without resources in saying that before the budget was agreed the terms of the treaty and the undertakings given to us about industrial, regional and social policy should be honoured.
The Foreign Secretary talked about whether the Community would veto us. There is another side to this. We are now members of the Community. We are not like people trying to join a club from which one blackball excludes. We are members of the club and we can say something about the way we think it ought to be run. I hope that the Foreign Secretary will be doing that, but not for one renegotiating period. I hope that he will do it during the brief time he holds his office and then, when he hands over the torch to this side of the House, I have no doubt that our Foreign Secretary, whoever he may then be, will carry on the same process of defending British and Commonwealth interests.
We have the same feeling that the right hon. Gentleman has expressed about farm surpluses, but it is worth bearing in mind that the so-called 100,000-ton beef surplus is, for this large Community, no more than three days' supply.

Mr. Nicholas Ridley: Does my right hon. and learned Friend not think that it might be a good thing to renegotiate the transitional period for British agriculture now? It would not only be of benefit to British

farming but might actually halt the price rises on food which are in the pipeline now that European food is a good deal cheaper than food in the rest of the world?

Mr. Rippon: That is a good example of the way in which circumstances change. I was pressed by agricultural interests to have as long a transitional period as possible. They wanted seven years. When I settled for five I was accused of betraying them. Now they wish they had not had a transitional period at all. That is an indication that the process of negotiation—once the treaties are accepted, and the Government accept them—is a continuous process in which regard must be had to changing circumstances.
There is a great deal in what the Foreign Secretary said in Luxembourg about the need for securing speedy improvements in the marketing regime of some major commodities. We might start with our own farmers, because unless the Government do something to improve their position then surely the danger is of a beef shortage rather than a beef surplus. The Minister of Agriculture conducted the current round of negotiations, and there will be a round each year, not just one renegotiated round which will take care of everything. At the moment the Government have opted out of the intervention system. The urgency at the moment is to reintroduce some form of guarantee for our beef producers. Next year the problem may be different, but the Government have a wholly false conception of what the negotiations are all about.

The Minister of Agriculture, Fisheries and Food (Mr. Fred Peart): The right hon. and learned Gentleman will know that the problem in Europe is that the intervention policy has not succeeded.

Mr. Rippon: The Government have opted out, and all we are saying is that there is an urgent need for action to help our producers. Next year it may be different, but the matter could be dealt with within the framework of the treaty and the common agricultural policy because the Foreign Secretary has just told us so.
Here again, what if we withdraw? It is a dangerous illusion to think that we can ever revert to the era of free access


to cheap food from the Commonwealth and the rest of the world. There was an article recently in a publication called West Africa in which the authors said that the Labour Government were proceeding on the wrong basis and that the era of cheap food from the Commonwealth had gone out with neo-colonialism. If the Labour Government withdrew from Europe, they said, they would find they had cut themselves off from the countries of Africa rather than forming a new and closer association with them. There is no quarrel with the Foreign Secretary's concern to ensure that the terms of entry are fully implemented according to the needs and wishes of the Commonwealth countries, but there is a risk of undermining existing firm agreements reached under the treaty if it is suggested that those agreements are not firm.
We have to see that agreements we made for primary products and sugar and for New Zealand are implemented. British representatives at the European Assembly have been pressing the Commission about this and about the safeguarding of the quantities. They have made a great deal of progress. I wish they could have had the support of Labour Members. In the Assembly we can also influence what the Commission does. The Foreign Secretary talked about the harmonisation of valued added tax. We talked in the White Paper in 1971 about a contribution from the value added tax fund, but we certainly got nowhere near harmonising it. We always said that we would not impose the tax on food and we never did. The Chancellor of the Exchequer has weakened that argument by imposing it on food. As a result the Foreign Secretary went to the Community in April and said that we did not want harmonisation of value added tax on necessities. We would press for the clarification that that does not mean harmonisation on food. We are entitled to press for that as a country.

Mr. Callaghan: I think I misunderstood the right hon. and learned Gentleman. I made clear in my speech that we have no intention of departing from that principle in any way.

Mr. Rippon: I was not intending to press the Government on that, but we are entitled to press the Community on it as

part of our case. There is nothing to suggest that we have to renegotiate things which are already contemplated by the treaties. We should be doing everything we can to ensure that the Commonwealth developing countries get association agreements under Protocol 22 of the Treaty of Accession. As the Foreign Secretary said at Luxembourg that is the best way of meeting the interests of those countries.
Protocol 22 not only set out the options for association, but stated clearly that an enlarged Community would have as its firm purpose the safeguarding of developing countries dependent on primary products, particularly sugar. The Conservative Government, both during and after the 1970-71 negotiations gave an assurance that it would be our firm policy to ensure that the Community proposal would be implemented so as to provide a secure and continuing market in the enlarged Community, on fair terms, for the quantities covered by the Commonwealth Sugar Agreement in respect of all its developing member countries. We said we would regard that as a specific and moral agreement and we expect the Foreign Secretary to insist that it is implemented. On some of these matters I should be a little rougher than the Foreign Secretary, who was like a cooing dove.
As for the Asian Commonwealth, there was a declaration of intent. We did not expect there to be any problems for at least two-thirds of their exports to Britain, but we attach great importance to the assurances by the Community that it would not only strengthen but extend trade with the Asian Commonwealth. India has an agreement and we hope that Bangladesh will reach an agreement about its jute. I think we can best serve the Commonwealth by seeing that those agreements are implemented.
On the developing Commonwealth countries it was recognised before the negotiations began that there would be no particular problems. Those countries had other markets in the world, particularly in their own parts of the globe. Nevertheless, quite apart from the special and crucial arrangements for New Zealand we took steps to ensure dutyfree entry into Britain for a whole range of exports from Australia, Canada and


the rest of the developed Commonwealth. We negotiated in Protocol 16— this is relevant to what the Foreign Secretary said in Brussels—arrangements to deal with problems that might arise in specific cases concerning agricultural products. A footnote to the protocol notes that these specific cases
so far as can be foreseen at present will be confined to butter, sugar, bacon and certain fruit and vegetables
but the provision is not limited in any way. This concept, which is built into the treaties, of not attempting to foresee the future in every detail, is at the heart of what the Foreign Secretary is now arguing on our behalf in Luxembourg. I would say that the terms of entry were right on the assumptions that could then be made, and given that we had to join the Community as it then existed. The treaties provide for a continuing process of negotiation, a process which would have been impossible had we been outside.
Finally, the House will have noted, I hope with satisfaction, the concluding passage of the speech in Luxembourg by the Foreign Secretary on 4th June. He said:
Quite distinct and separate from the problems I have been discussing is the feeling that there exists among Community members a diminished unity of purpose, a growing divergence in our economies and a readiness to seek nationalist solutions to problems which demand common and joint action.
That is why I agree that the Foreign Secretary was right to say that with the Budget and everything else there had to be solutions which maintained a fair balance of mutual advantage between all members as circumstances developed. As the German Chancellor is reported today as saying, with all the dangers of inflation which beset us isolationism is no solution for any country in Europe today. It follows from what the Foreign Secretary said that it is all the more important for Britain to try to bring a renewed sense of urgency to the development of the Community and to work within the Community for that purpose. This is a tremendous advance on the attitude the then Opposition were taking when we were negotiating entry and when we were debating the terms of the treaty in the House.
We must welcome the Foreign Secretary's assurance that in addition to proposing solutions which can be reached without disrupting the treaties the Government have chosen to play a full part in the ongoing work of the Community. That is a considerable advance on some of the things which have been said before. I hope they will extend in due course to sending a full delegation to the European Assembly where we can exercise a British influence on the development of European affairs.
Above all, let us never forget how right our present Prime Minister was when he said in Strasbourg in 1967,
Over the next year, the next 10 years, the next 20 years, the unity of Europe is going to be forged and geography, history, interest and sentiment alike demand that we play our part in forging and working it".
That is as true today as it was in 1967.

5.40 p.m.

Mr. Douglas Jay: One fact which has clearly emerged from the debate is that the Conservative Party still has no intention of allowing a final decision on this issue to be taken by the British electorate. In fairness, however, I say to my right hon. Friend the Foreign Secretary that his speech in Luxembourg on 4th June will have to be spelled out in much more detail than we had today before he will convince the House or the electorate—or indeed, the Labour Party—that the speech faithfully carries out the party's election manifesto, as I am sure he is sincerely anxious it should.
For instance, in his speech on 4th June my right hon. Friend said virtually nothing about the legislative sovereignty of the British Parliament, though he did today. Yet at this moment—although it would not be thought so from the speech of the right hon. and learned Member for Hexham (Mr. Rippon)— regulations, directives and decisions are being promulgated every week by the EEC Council and the bureaucratic Commission in secret, without approval by any elected body, which claim the force of law in this country. In some cases, indeed, they claim to be legally in force before they are even published.
This is legislation by decree by the Executive, and this has never been accepted by the electorate and ought not,


in my view, to be accepted by the House—

Mr. Atkinson: And not by the Labour Party.

Mr. Jay: Nor are these decrees all on purely trivial matters: . Lord Denning— not I—has just said that the Treaty of Rome is like an oncoming tide; it flows into estuaries and rivers, it cannot be held back. Compare that, incidentally, with what I regard as one of the most glaring falsehoods of all by the Leader of the Opposition's 1971 White Paper in which it was stated that there would be no surrender of essential national sovereignty. Let me give an example. The Council of Ministers of the EEC has just promulgated one of those authoritarian decrees. It is, for those hon. Members who are interested, R 1253/74 (FIN. 306), which covers the main lines of economic, budgetary, monetary and fiscal policy in this country in 1974. I have it here and I should not have thought that there are many hon. Members who have even read it so far. I am advised that this directive claims the force of law, and that if my right hon. Friend the Chancellor of the Exchequer introduces the wrong sort of Budget later this year he could be hauled before the Common Market Court at Luxembourg. That nonsense is wholly contrary to the election manifesto, which binds the Government. The relevant passage here will be well known to my right hon. Friend the Foreign Secretary, because he quoted it in his 1st April speech and quoted some of it again today. The manifesto said that one of our main objectives was the retention by Parliament of those powers over the British economy needed to pursue effective regional, industrial and fiscal policies.
That is wholly inconsistent with the directive with which we are now threatened. That pledge in the manifesto cannot be carried out unless the new settlement for which we are negotiating contains a clear declaration that the Brussels decrees have no force of law in this country unless approved by the British Parliament.
My right hon. Friend the Foreign Secretary spoke today about the so-called Scrutiny Committee of this House, of which I have the honour to be a member. But nobody should complacently

imagine that this legislative torrent from Brussels is being happily and smoothly unravelled by this Committee dealing with European secondary legislation. The Committee is doing its best, but there are dozens of these legislative decrees pouring out of the Brussels sausage machine week by week at a rate which makes it extremely difficult, at any rate with existing resources, to deal adequately with them, unless the House gives far more attention than it has done to the fundamental problem. I give as an example the fact that regulations and directives of the Commission, which are far more numerous than those of the Council, are not yet being examined at all.
I am sure that the efforts by my right hon. Friend the Foreign Secretary are well-meant; but they will not satisfy the British people if he continues to assume, as he almost seemed to be assuming on 4th June, that the Budget payment to the Brussels farm relief funds is the main prospective burden on the British economy. It is important, but the Budget burden is at present about £100 million a year and is likely to rise to between £300 million and £400 million. But the burden of the common agricultural policy and the trade deficit with the Six is already over £1,000 million and will in all probability rise further. It is these latter burdens which have to be removed if this country is not to decline into a third-rate Power.
We were promised in propaganda from the Opposition that the "huge home market"—that was the phrase—of the EEC would restore our economy. Here it is our trade with the Six—not with the Eight—that matters, because we already had free trade with Denmark and Ireland. Our trade with the Six showed a negligible deficit in 1970; a deficit of over £1,100 million in 1973, and a deficit of £538 million in the first four months of 1974. That is a rate, this year, of about £1,600 million a year. The only thing which has been dynamic so far has been our trade deficit with the Six—and that is the great home market for which we were asked to sacrifice the right of a democratic people to govern and legislate for themselves.
More serious is the common agricultural policy itself. The burden which it already imposes on our standard of living and balance of payments is not merely


already serious, but is bound to get worse unless we free ourselves from it. I am not at all satisfied that my right hon. Friend's proposals are as fundamental as the manifesto promised. It is conventional with pro-marketeers to argue that the common agricultural policy no longer matters because some EEC prices are lower than world prices, but I believe that people who repeat this are out of date and out of touch with the facts. Since February of this year world wheat prices, which matter most, have fallen faster than almost at any time this century. The fall in wheat prices, as the Economist recorded on 25th May, is now nearly 50 per cent. since February. On 2nd May world wheat prices fell below the EEC threshold prices, and at that point of course import levies are automatically imposed to prevent the consumer benefiting.
The Economist says this week that world grain prices—not just wheat—are now below the EEC support prices and small import levies have come back on in the last two months.
This precipitous fall in wheat prices, which has refuted a great deal of silly and ignorant talk in recent months about cheaper food being gone for ever, is, of course, due, as many people predicted, to the United States' decision to cancel all restriction on grain acreage. As a result, though the Canadian and Russian prospects for 1974 are uncertain, the United States' grain acreage this year is higher by 50 million acres—more than France's entire arable land—and this year's United States wheat crop is expected to be 20 per cent. or 30 per cent. higher than the last.
It is not just wheat. The basic feeding stuffs—maize, barley and soya beans— have all fallen substantially in price since February.
Therefore, it is increasingly true every month that the common agricultural policy is depriving the British people of cheaper food. The New Zealand Trade Minister said categorically recently that New Zealand could now supply this country with cheaper lamb, butter and cheese if allowed to do so. But she could not do so unless we amended the Treaty of Accession which lays down hard and fast the exact quotas and amounts.

As for beef, the Economist—again, not I—rightly said, on 4th May:
The snag with the working of the Nine's present beef system is that low-price beef is entering the Community from outside at the same time as large amounts of home-produced beef are disappearing into EEC stock piles.
The same is true of flour and bread, as I could expound if there were more time.
In any case, if anyone still argues that food prices are lower and likely to remain lower in the EEC than outside, why do we have to impose all these import taxes and intervention buying and hoarding? Anyone who sincerely believed this story would be in favour of dismantling this whole ghastly apparatus of restriction.
The truth is, of course, that none of us knows—certainly I do not—the future of world prices. All we know is that inside the EEC they are bound to go up. Therefore, the only prudent course for this country—still the world's greatest importer of food—is to be free to take advantage of either outcome. To be irrevocably bound to the least probable hypothesis is a national folly.
The Labour Party's election manifesto which has been so much quoted today, and which I know is dear to my right hon. Friend's heart, was therefore abundantly justified in laying down as a major objective
major changes in the common agricultural policy, so that it ceases to be a threat to world trade in food products and so that low-cost producers outside Europe can continue to have access to the British food market.
When the promised referendum comes, the electorate will certainly want to know whether that pledge has been fully carried out.
Therefore, the Government must not make the mistake, for which the present Prime Minister rightly criticised the previous Government, of failing to prepare an alternative policy to adopt if results acceptable to the British electorate cannot be obtained in these negotiations. There is obviously at least a 50-50 chance that they will not be obtained, in view of the bleak French reaction to my right hon. Friend's proposals which has already been quoted today. If the CAP is untouchable, I do not see how a fundamental reform is possible.
The alternative—the practical solution, as the right hon. and learned Member for Hexham called it—for those who are not


blinded by prejudice, is for this country to rejoin the EFTA group of countries who have greatly prospered outside the EEC—Norway in particular—and which have or will very soon have a 100 per cent, industrial free trade area with the EEC, including ourselves.
Of course, a desperate propaganda effort is now being made to argue that, for some obscure reason, this country could not rejoin that group. That is pure fiction, and those who argue it do not understand what it means. We already have, or soon will have, 100 per cent, industrial free trade with both the EEC and the EFTA countries. The EFTA countries certainly wish to maintain it with us. It is interesting that even in Denmark the latest opinion polls show a 60 per cent. to 25 per cent. majority in favour of Denmark's withdrawing from the EEC if Britain did.
The assumption apparently is that the EEC would somehow try to prevent this.

Mr. Rippon: Will the right hon. Gentleman try to answer one of the questions which comes up? Even supposing that one could recreate EFTA, which may be difficult, if this 100 per cent. free trade area existed, how would that affect the balance of payments argument that he is always advancing?

Mr. Jay: It would affect it because if we fundamentally reformed the common agricultural policy our costs of living and labour costs would be much lower. That is the answer; if the right hon. and learned Gentleman does not understand that, after all our debates, he never will.
If it is assumed that somehow the EEC would prevent such a move as I have described, that would mean that the EEC, or part of it, would have to raise its industrial tariffs against the United Kingdom, alone of the 17 or 18 countries involved. That is a proposal so absurd that even the French Prime Minister would not propose it.
Even if this were to happen—this is another point that the right hon. and learned Gentleman does not seem to understand—the EEC's common external tariff on industrial goods after the Kennedy Round is only, on average, 7 per cent or 8 per cent. and is likely to come down further in the new GATT negotiations starting this year. It is no

longer a major factor in the world trade situation. The picture of British exports being savagely hit by this low tariff are just as mythical as they were in the case of Norway, when huge unemployment was predicted if she stayed out, and exactly the opposite has happened.

Mr. Marten: Does the right hon. Gentleman also recall the 1970 General Election? He may have read the Conservative manifesto on this very subject of remaining outside, which said:
We can negotiate with the EEC, confident in the knowledge that we can stand on our own if the price is too high.
Since then of course there has been an enormous increase in the potential of North Sea oil. That strengthens the judgment of the Conservative Party in 1970 that we could stand on our own.

Mr. Jay: I occasionally agree with the hon. Member, and in this case I agree with him that the Conservative Party was much wiser in 1970 than it is today.
Secondly, we should retrieve what we can of the damage done to Commonwealth trade by the 1972 settlement. Much damage was done, but the countries that really matter to us—Australia, New Zealand and Canada—have been markedly restrained, so far, in raising tariffs against our exports. The damage could accordingly soon be halted and reversed, if we acted with adequate decision and speed, and with anything like the effort put into the EEC policy in recent years.
Therefore, our long-term objective should be a genuinely liberal trade association throughout Western Europe, wider and looser than the present EEC, but including it, with industrial free trade all around, more outward-looking towards the rest of the world, and with no compulsory common agricultural policy or legislative decrees from Brussels, except for those countries which wished to accept them. Such a truly West European grouping could, if that were generally desired, be held together by some overall ministerial authority, perhaps through OECD or NATO, which we could all support and which would be genuine, not enforced, European unity.
I believe that that is what the British people would prefer—certainly the Scandinavian countries also would, and, I suspect, many others in Western Europe


if it were really put to them. The present British Government therefore will be very unwise if they do not prepare actively for this alternative. For the British people have the right through the ballot box, if they wish, to reject any other solution.

6.0 p.m.

Mr. Reginald Maudling: I was intrigued to hear the right hon. Member for Battersea, North (Mr. Jay) talking about an industrial free trade area. My mind went back to 1957 when we tried hard to establish precisely that. It was probably at that time the best solution, but it did not come off. I am afraid that the world has moved on a great deal since 1957 and that the considerations are now rather different. For Britain now to leave the Community would be a disaster in political terms and probably in economic terms. It is a different matter leaving a community, with all the consequences involved, than trying to get into a community, as we tried to do during long years of negotiation.
On looking back on the history of our negotiations with Europe since the early 1950s it has been a long, a mixed and sometimes a sad story. It was sad when we first in 1953, I think, underestimated the significance of the Messina Conference and underestimated the impulse among the Six to form a genuine community. We then tried to form an industrial free trade area. That foundered for two reasons. The first reason was the opposition of France. It must be remembered that when we started our negotiations we had the assurance of both the French and the German Governments that once the Treaty of Rome was in operation they would join with us to form a free trade area that could embrace the whole of Western Europe.
During the long period of negotiation the French situation changed. We started the negotiations with a French Government that wanted to say "Yes" but had not the strength to do so. We finished with General de Gaulle. He wanted to say "No", and he did not lack the strength to do so. The other reason for the failure of the initiative for the free trade area was the genuine feeling of those who most strongly supported the concept of the Community of Six that such a Community would be drowned in a

wider community of a loose free trade area character. For those reasons the attempt to set up the sort of free trade area to which the right hon. Member for Battersea, North referred failed all those years ago.

Mr. Jay: Does the right hon. Gentleman agree that the main difference between those years and now is that the industrial free trade area between the EEC and EFTA is now in existence?

Mr. Maudling: There is more to it than that. When the free trade area negotiations failed, we formed EFTA. Let us remember the purpose of forming it. The first purpose was to achieve a widening of the area of freedom of trade. That was very small in comparison with the whole European concept. The second purpose was to avoid the further fragmentation of European trade. The third purpose, and perhaps the most important in the minds of our EFTA partners, was to provide a bridgehead from which we could further negotiate with the Six for a pan-European solution. It was always part of the EFTA concept that EFTA would help us to go forward and to evolve a situation that would cover the whole of Western Europe.
We cannot go back now. I do not think we can reconstitute EFTA. The predominance of the British economy and the position of Denmark in economic terms in the constitution of EFTA do not allow a reconstitution. Nor is there a chance of getting agreement from the other Western European countries for the sort of industrial free trade area which we would like. They have always thought and they would think now, and especially France and Italy, that such a concept would be entirely to the benefit of the United Kingdom and not to the benefit of themselves.
Further, I do not think that we can contemplate the possibility of re-creating another Commonwealth trade system. The Foreign Secretary has recognised that the trade pattern of the Commonwealth has changed fundamentally with total diversification. Any attempt to try to recreate the old Commonwealth system would not be attractive to the Commonwealth. That is particularly so when it is suggested that all we can offer the Commonwealth is a faltering economy. The Minister of State for Foreign and


Commonwealth Affairs was talking about that matter recently.
If we came out of the Community we would be alone in a world in which the strength and influence of the great Powers in both political and economic terms is becoming increasingly decisive.

Mr. Marten: Will my right hon. Friend explain what he means by being alone? What are all the other independent countries in the world doing? Are they all alone?

Mr. Maudling: We should be alone in the sense that we would have no special relationship with any European trade partners. We should be alone in political terms. The voice of a powerful country within a large group is infinitely more likely to carry weight than the voice of an equally powerful country speaking alone. That is the situation we must face. If we opt out of the attempt to achieve a collective European voice and a collective European economy, we will have few friends left in Western Europe. If the reasons for our opting out of the attempt to achieve European unity arise from party political considerations within this country, we should not re-create a friendship in Western Europe for a long time. It appears now that if we decided to move out it would be for such reasons.
It is apparent from what the Foreign Secretary said that the Government now accept the principles, the workings and the wording of the Treaty of Rome, including the position and effectiveness of Community law and the relative position of the sovereignty of this Parliament.
It is essential in the interests of these long-term matters that the purpose of Her Majesty's Government should be understood. Certain doubts are created by talking about a referendum and the linking of a referendum with a General Election. There could only be an election on this issue if the Foreign Secretary failed. He is attempting genuinely and openly to reach agreement with the Community. If he succeeds and if there is an agreement, what is the purpose of having an election? All the parties would be in agreement. There can only be a referendum when the parties take a different view. If the Foreign Secretary succeeds—my right hon. and hon. Friends profoundly hope that he will do so—

he has made it clear that he and his colleagues will recommend that the United Kingdom should remain within the Community. In those circumstances the leaders of all the parties would be making the same recommendation to the electorate.
Of the issues which have been raised by the Foreign Secretary, it is clear that the budget contribution is obviously a genuine and definite matter. I was shocked to hear of the arguments advanced about the predicted poverty of this country in 1980. The Minister of State is reported in The Times as saying that by 1980 we shall be one of the poorest countries in Western Europe. Of course, by that time North Sea oil will be flowing.

Mr. Gordon Wilson: Scottish oil.

Mr. Maudling: No doubt it will smell the same and cost the same. Is it right in the interests of our negotiating position to decry our economic prospects? We are seen to be doing so not because of any lack of confidence in ourselves but because of the strange extrapolations of an American think-tank expert who occasionally appears on the Western European scene.
The second range of matters which the Foreign Secretary is discussing are not so definite and not so concrete. They include agricultural policy, trade policy and economic policy. There are included a number of matters which are to be identified in the context of a growing and developing Community policy. Having accepted the framework of a common agricultural policy, the Foreign Secretary must recognise that the policies which he is dealing with are changed from time to time as conditions such as world prices and supplies change. As such matters change, the reaction of the Community will change.
It is all very well to say that we want definite concessions on trade, agriculture and economic matters and that if we do not get them we shall withdraw. But can we be sure that certain matters will take place in one year, two years or three years? Can we always claim the right to withdraw if we do not get our own way, or should it be made known that the Government, on having reached what


they consider to be a satisfactory position of renegotiation, accept the whole concept of Community discipline and Community decisions in the light of the Luxembourg declaration to which the Foreign Secretary referred? These are matters on which the attitude of the Government must be made clear not only in Europe but in this country and within the Labour Party.
One matter which the Foreign Secretary mentioned only briefly in his European speech but which seems to be of fundamental importance is the question of economic, monetary and political union. Where do the Government stand on that? I see that there has been argument in the last day or two about the use of the word "union". This argument, to my knowledge, has gone on for 15 to 20 years. Apparently it is because "unity" and "union" in the English and French languages do not mean the same thing. Constant misunderstanding arises from that. What do the Government believe to be the right concept of the Community in the long term? Do they believe, as many members of the Community believe, in union in the full sense? Do they believe that there should be general progress through concerted action to common action? That is what the Community is about. If the Government do not accept the principle of progress through concerted action to common action, are they genuine in their desire to have a meeting of minds with the rest of the Community?
The touchstone is a common currency. Do the Government accept a common currency as a particular policy? After all, if we have a common currency it needs a common economic policy, common institutions to manage that policy and common political authority to oversee those institutions. Where do the Government stand on this? Do they accept a common currency, with all its consequences, or do they not?

Mr. Roger Moate: Is my right hon. Friend saying that he favours a common European currency and common economic policy plus political union?

Mr. Maudling: I have always made it clear that 1 believe in concerted action through to common action, which will have to be over a long period. But I

believe that it will, over a period, come to fruition. What we are entitled to know is the attitude of the Government on these matters. It is no good expecting to have effective negotiation unless all the cards are on the table face up.
We on this side of the House hope that the negotiations will succeed. We believe that the Foreign Secretary is proceeding on the right lines. If he continues to do so, we believe that he will get a sympathetic hearing from our European partners and that we will be able to return with a triumph of negotiation, although perhaps it will be a disappointment in party political terms to Members on the Government side.

Mr. Callaghan: Will the right hon. Gentleman refer to paragraph 6 of my speech of 1st April, in which I set out clearly the Government's attitude on the whole question of economic and monetary union, including permanent fixed parities to be achieved by 1980? He will find the answer there.

Mr. Maudling: Did that appear in the right hon. Gentleman's second speech?

6.13 p.m.

Mr. John Cronin: The right hon. Member for Chipping Barnet (Mr. Maudling) took my right hon. Friend the Foreign Secretary to task for suggesting that Britain might have a relatively low standard of living in 1980. The right hon. and learned Member for Hexham (Mr. Rippon) made the same point. They should both bear in mind our situation at present in relation to the other members of the Community. As I understand it, we have a lower gross national product per head than any other country in the Community except for Ireland and Southern Italy. The suggestion that we might be in some real difficulty in 1980 has considerable foundation because the other countries will not be standing still between now and then. We must make the provision which my right hon. Friend very sensibly made in his statement.
I congratulate my right hon. Friend on his speech last week and on his amplification of it today. We must all admire the strict and rigid way in which he has held the Labour Party manifesto to his heart and how it has emerged from his lips in a most palatable form. I am


always uncomfortable in praising my more distinguished colleagues because it might indicate that one has a special interest. At the same time, if my right hon. Friend achieves the renegotiation which he has in mind he will probably go down in history as one of the great Foreign Secretaries. But it is a big "if". There are many stumbling blocks to the negotiations.
One must also be grateful for the rather precise arrangements which are to be made for parliamentary control in the negotiations. Of course they are not perfect and do not satisfy quite a few hon. Members. Nevertheless they are a genuine and substantial advance in getting a real say by this House in the negotiations.
But one or two things in my right hon. Friend's speech rather disturb me. He said that politically it would be undesirable for us to leave the Community. I think that the majority of hon. Members would say the same thing. [HON. MEMBERS: "No."] I accept that there is a strong minority of hon. Members who would disagree, and I accept their view, but it is fruitless to argue it now. I still maintain, however, that the majority of hon. Members would agree on this point with my right hon. Friend. [HON. MEMBERS: "No."] Possibly they are not in the Chamber at the moment.
I am rather concerned, though, when my right hon. Friend says that he is not certain whether there would be any real economic disadvantages in our leaving the Community. He may be right. I hope that my hon. Friend the Minister of State will pursue this point in more detail later.
First, what disadvantages should we have from losing the removal of tariff barriers and of non-tariff barriers, which I think are important? My right hon. Friend the Member for Battersea, North (Mr. Jay) pointed out that there was a considerable deficit in our trade with the Community countries last year. I think he might agree with me, however, that most of the deficit was due to the floating of the pound, an exceptional situation. I suggest that in terms of the volume of trade we broke roughly even with the Community. I want to know what forecasts there are of the extent to which

trade is likely to increase during the next two years.
There have been some suggestions of alternatives—for example, that if we leave the Community we can start up a free trade area with the EFTA countries. But if successive British Governments have spent 10 years negotiating to get into the Community and as soon as we are in we break the Treaty of Accession —that, in bald terms, is what it means— what country will regard us in future as serious negotiators? That is a matter of considerable doubt. The idea of starting another free trade area with the EFTA countries seems to be dubious. What interest would they have in going ahead with us? How would it help?
The Commonwealth countries are also negotiating their own arrangements with the Community. Until recently France made it a point that there should be preference in the EEC for members of the old French community. If we leave the EEC, France will insist again on that situation. We may then find that there is discrimination against us by Commonwealth countries.
Again, what interest would the eight members left in the Community have in a free trade area with us? How would it help if we left the Community in a blaze of odium? What incentive would there be for them to enter into arrangements with us to have a free trade area? All this is very doubtful.
What my right hon. Friend is proposing today, and what he proposed in Luxembourg, is diametrically opposed to the interests of France, and France will unquestionably be the stumbling block in the negotiations. How is my right hon. Friend to get round that? I do not think it is possible to overestimate the aptitude which the French possess for having their cake and eating it. Let us look at the way they treat the United States. The United States is almost a political outcast to France, yet France depends on the United States for its defence. That is a typical example of how the French get away with the most unreasonable positions.
Somerset Maugham once said that the French regarded themselves as being the most intelligent, cultured and civilised people in the world and that the most


intolerable thing was that they were completely right. Perhaps not everyone will agree with that, but I think that my right hon. Friend will have his work cut out in dealing with the French.
There are only two ways of coping with the French. One is to show that any package deal which my right hon. Friend gets will produce a net advantage to them. The other way will be to show that worse will befall them if they do not fit in with the terms he is negotiating. But I cannot imagine that the French will feel disturbed at the prospect of our leaving the Community, thereby leaving them and the Germans as the dominant forces in it. I cannot imagine that my right hon. Friend can frighten the French by inducing the Germans to contribute more to the Community budget, because Germany in the long run will always back France rather than ourselves as the winning horse.
That might well be a strong card in the Foreign Secretary's hands in our vote on the common agricultural policy price-fixing next year. That might well be an inducement. He must produce positive inducements to the French to overcome their objections. One objection is the fear that the French have of economic domination of Europe by the United States. That might be an unreasonable fear but anything which can reduce that fear would help. I suggest that a common Community policy instead of a policy in association with the United States of America with regard to the Arab States might do something to assuage that fear.
It might be helpful if my right hon. Friend the Foreign Secretary were to make proposals to ease the financial difficulties of the French balance of payments in the face of the approaching oil crisis. We are feeling the effects of an adverse balance of payments now, as probably are the Italians, but the French will feel it soon. One could draw money from the International Monetary Fund. Surely it would be better if in consultation with the French we could set up some sort of reserve fund in Europe which was exclusive of American help. The French Government would regard this as an attractive proposition.
Germany is seriously worried about her future with regard to oil imports. An

assurance to Germany that North Sea oil could be flowing into the German refineries would be an inducement to Germany to assist us in our negotiations.

Mr. Gordon Wilson: Is the hon. Gentleman aware, having read the Brown Book issued by the Government, that the reserves of oil in the North Sea, although great in many respects, are very small by comparison with the world's oil re-reserves and are insufficient for us to concede in any way? One might talk about this, from the British as well as the Scottish point of view, in terms of getting rid of sources of oil which it might be necessary to conserve under the ground or on the sea bed for future generations.

Mr. Cronin: I accept the hon. Gentleman's point. There will be surplus oil to export to Germany at a fair price with fair advantages to Scotland as well as to the rest of Britain. A further point is that this will be helpful from the negotiating point of view and in increasing defence solidarity. Defence constitutes a great worry for Europe.
I suggest to the Minister of State that if in future we agree to send Labour Members to the European Parliament at Strasbourg, that will again be a useful card to play. I would suggest that a package deal consisting of these advantages—these carrots held in front of the EEC rather than any stick—would probably obtain at least a large part of the terms which the right hon. Gentleman wishes to negotiate.
With regard to the time relationship of the negotiations to a General Election, it is self-evident that the Government, with their present situation in the House of Commons, cannot speak with a strong voice in the EEC. I suggest that the Minister of State and the Foreign Secretary should put all the pressure they can on the Prime Minister to ensure that we have a dissolution and the return of a Labour Government with a substantial majority—because that is what would happen—before proceeding to any advanced stage in the negotiations.

6.24 p.m.

Mr. Peter Kirk: Although I am sorry that the Foreign Secretary has had to leave after listening to a great deal of the debate, I am relieved because otherwise I would undoubtedly


have been moved to join my congratulations on his speech to those of the hon. Member for Loughborough (Mr. Cronin). That would not have done him any good at all with the grim-faced crew behind him who clearly did not enjoy any of it.
It was a remarkable speech of a kind we have learned to expect from the Secretary of State. Nobody is better at concealing his retreats as advances than he in all the offices he has held. This would appear to be the situation again. The House will not be surprised to hear it. I welcome it very considerably.
Before getting down to the details of renegotiation, I suggest that it would be helpful if when he replies the Minister of State could give us a little clarification about the Government's general policy with regard to ongoing Council business. This seems to be slightly schizophrenic.
We have the very welcome decision of the Government to join with the other Governments of the EEC countries to increase the powers of the European Parliament. This is something for which I have been pressing and working fairly hard for some time. Indeed, the proposals now accepted are roughly those put forward by the Conservative group in the European Parliament last October. It is true that the implementation of those parts of the proposals which require treaty amendment must go hand in hand with renegotiations. I see no harm in that. There is a great deal of work to be done. We can get down to it now.
It seems curious that these additional powers, though granted to Members from the Conservative and Liberal Parties, are still apparently to be denied to the Labour Party Members. I hope that the time will not be long before they join us in these very important matters, particularly of the control of Community expenditure, which is something about which we feel strongly.
But at the same time as the Council last week accepted that, at the Council of Social Affairs Ministers yesterday the Under-Secretary of State for Employment—this was the information I had before leaving Strasbourg last night— blocked the redundancies directive, which seems to us and seemed to the Government to be something worth having. It was blocked on the rather specious

grounds that they were re-examining the whole question of redundancies.
There is no reason why the Under-Secretary should not have let the directive go through as redundant workers in the eight other countries of the Community will now be deprived of the Community protection which they would otherwise have obtained. They should enjoy these benefits now rather than have to wait until a further Council meeting later this year or early next year. It would be helpful if we could know what the scope of ongoing Council business which is liable to proceed is to be, and what will be liable to fail. Hon. Members here who are also members of the European Parliament— there are a few—would agree with me that it would be helpful for us to get an idea of the things on which it is worth while continuing our work and what is liable to be chopped by the present Government.
The remarks of the Foreign Secretary concerning the parliamentary scrutiny committees are extremely welcome to us who work in the European Parliament. I hope that my right hon. Friend the Member for Knutsford (Mr. Davies) will not overlook the fact that the work of scrutiny does not take place entirely within the confines of the Palace of Westminster. Not only does the European Parliament exist for the purpose of scrutiny and of controlling the Commission—the Foreign Secretary said that the Commission was not answerable to anyone, but it is answerable to us—but there are similar bodies in other Parliaments of which we have considerable knowledge. It is useful perhaps for this House to know the way in which, for example, the committee in the Folkcting in Denmark is looking at a particular directive at a given moment to see whether there is any general Community approach within the national Parliaments to these problems.
The relationship between Community institutions and the national Parliaments has been very badly neglected both during the days of the Six and since the expansion of the Community in January 1973. I hope that this is something to which my right hon. Friend's Committee will be able to give a great deal of new impetus. As I say, we have a slightly schizophrenic approach. Whether it depends upon which Minister


attends which Council and upon the nature of the subject is not clear, and we would welcome clarification.
One thing that is clear after the second Luxembourg speech of the right hon. Gentleman is the scope of renegotiation, which is obviously a matter of real concern to the House and the Government. What is most interesting is that all four of the major problems raised by the Government both in April and again last week were—and are still—the subject of what one might call renegotiation within the Community institutions before the change of government this year. There is nothing new about any of them.
The question of the size of the British contribution was raised as long ago as last July in the European Parliament by a former hon. Member, Mr. Rafton Pounder. We have been working on that. It will not have escaped the Government's notice that recently, in line with what the Foreign Secretary said, we secured with some difficulty the writing into the Community directive on harmonisation of value added tax a provision on zero rating—the work of my hon. Friend the Member for Kensington (Sir B. Rhys Williams)—which again is a matter of considerable importance in renegotiation.
In the same way, the idea of the right hon. Member for Battersea, North (Mr. Jay) that nothing has been done about the CAP is untrue. The Foreign Secretary pointed out that the Minister of Agriculture—some of us think rather unwisely—has suspended one part of it in so far as it applies to this country, and the Italians have dealt with it in a cavalier fashion by their import deposit scheme.
In October Mr. Lardinois, the Agricultural Commissioner, produced a scheme for reform of the CAP which, although in my view it did not go far enough, nevertheless showed that the word "untouchable" was used by the French Government in this context incorrectly. Like so many words used by the French Government, it was used more to signify a brisk exchange of cannonade than to signify that they would not advance on the battlefield. The French have always been good at marking out beforehand the ground they will

not give, but at the end of the day one usually discovers that a bargain has been made.
On the question of Commonwealth access, we wrote into the sugar directive the 1.4 million tons which was not explicitly promised by the Community to the previous Government when they were negotiating but was the subject of the curious French phrase "aurait à coeur" which no one has been able successfully to translate into English. We wrote that in, but were in some difficulty when there was a shortfall of 300,000 tons in delivery from the Caribbean. It will be difficult to persuade the Community to keep an on-going figure of that size unless we can be assured of effective deliveries of cane sugar into the Community.
Equally it will not have escaped notice that we have secured a good implementation of the joint declaration of intent with India in the form of the Indian Agreement, which was welcome by the Indian authorities concerned. As my right hon. and learned Friend the Member for Hexham (Mr. Rippon) said, it is important that we should keep going the negotiations with Bangladesh and Pakistan, although Pakistan is no longer a member of the Commonwealth.
All these things have been going on. Regional policy, I suspect, is the most difficult problem of all, although it is not difficult in the sense of the undertakings that the right hon. Gentleman is trying to secure. I do not think he will find much problem there. It is true that the previous administration said during the negotiations that they intended to phase out special aid for the regions in the form of the regional employment premium, but that decision was reversed before the previous Government left office. I do not think that will be the major stumbling block. The major stumbling block will be to get the regional fund off the ground at all. A major mistake was made—I have said this before in public—by my right hon. Friends in not taking the modified sum when it was offered and building upon that. If we had done that, we could have built up a regional fund from smaller beginnings into something very much more effective.
Now we are in a difficult position over regional policy, because unless we can get the guidelines absolutely right and the areas strictly defined we shall be


asking some of the wealthier countries of the Community to undertake what is becoming almost an open-ended commitment if things proceed as they are at the moment. Nevertheless, even on that the process of renegotiation was well under way before the change of government.
All that has happened is that the Secretary of State in his two Luxembourg speeches has formalised what had been an unformalised but on-going process in which many people were involved. That is part of the lesson that the Community is in itself a living and flexible instrument. Even if it is going through rather a bad time at the moment, there have been distinct signs over the last week or 10 days since the meeting between President Giscard d'Estaing and Mr. Schmidt and at the Finance Council meeting last week —at which the Chancellor of the Exchequer made a notable contribution— that the Community is beginning to recover from the paralysis which has lasted for some time and which, I suspect, came more from national difficulties than from anything inherently wrong in the Community structure.
To me the surprising thing—this is possibly where I might join hands with some hon. Gentlemen on the Government benches—about the renegotiation is the modesty of the Government's proposals. There are many other things which in the process of on-going renegotiation desperately need to be done. A major effort is needed in institutional reform which will be of vital importance. Despite what the Foreign Secretary said, we need to make some progress towards economic and monetary union. Unless we do, there will be no eventual solution to the type of monetary and currency problems which Western Europe faces.
We need a more effective social policy. We need urgently to examine the whole question of migration and the rights of migrants within individual countries. There is a vast range of topics which I am surprised the Government have not brought up which would be of benefit to this country and to the Community.
The problem for the Government was that at the time when they drafted the Labour Party manifesto, which the Foreign Secretary clutches to his bosom like a security blanket, they had not fully

realised the real nature of the Community, and that is where the difficulty about the referendum comes in. The Government refused to take part in the institutions. They did not see that there was not a time in the development of the Community when one could say "We have now reached a point at which we must take a decision." That time was at the time of joining, and there will not be a time during the process of renegotiation.
During the whole process there will always be on-going current business on which Parliament or the people should be consulted. For that reason, my view of the referendum—I think that my right hon. and learned Friend the Member for Hexham probably shares this view—is the same as that expressed by the Prime Minister in a television programme on 28th May 1970, when he said:
I think it is right that it is … Parliament which should take that decision with a sense of full responsibility, with a sense that reflects national views and national interests.
He added:
I should not change my attitude on that".
That is the caveat we have learnt to expect from him.
He expressed that view because it is an on-going business, something that does not divide itself into chapters time-wise or even section by section. It is almost impossible to slice it off and say "At this point we ask somebody to take a decision". One can ask the House to give a judgment on the views expressed by my right hon. Friend the Member for Knutsford and his Committee. Occasionally one might ask the members of the European Parliament to assist the House in its judgment. The process is one coherent whole that cannot be divided. That is where the referendum argument is wrong. The election argument is a different matter. No Member of Parliament has been thrown out because he voted to join the Common Market.

Mr. Arthur Lewis: Yes, they have.

Mr. Kirk: Only one member of the European Parliament was defeated at the last election, and the results of that election did not show any popular desire to sweep into office the only party who put renegotiation on its platform. The election question is a different one from


the referendum question. The referendum question is an impossibility.
I do not want to detain the House very long but I think that when considering these grave matters we should be aware of one fact. We did not join the Community for purely economic reasons. Some of us did not joint even primarily for economic reasons. It was the Prime Minister himself who in a speech at Strasbourg in January 1967 quoted Wordsworth:
High Heaven rejects the love of nicely-calculated less or more.
The danger of the sort of negotiations which the Labour Government are now carrying through as reflected in the "nicely calculated less or more" may affect the great line of European unity which we are trying to develop and which attracted not just 160 votes in the last Parliament but a majority of over 400 in the previous Parliament when the then Labour Party first applied for membership. That great line will get lost in the details which we have been discussing today.
The basis of the Community is political. That has always seemed a somewhat shocking statement to some Labour Members, but the basis was political. The reason why the Coal and Steel Communities were chosen in the first place was that those were the fundamental industries which ensured that anything other than unity between Germany and France was impossible from then on. It was designed to be a political instrument —designed to set an example to the rest of the world as to how countries could work together without war; how they could surrender some of their sovereignty in pursuit of a greater sovereignty, greater influence and greater economic strength. This was what it was all about. This was what we fought for over 20 years or so both in this House and outside it.

Mr. Arthur Lewis: That was what Hitler did.

Mr. Kirk: Hitler tried to do it by force. We are seeking to do it by consent. The hon. Member for Newham, North-West (Mr. Lewis), who is a member at the Council of Europe, is contributing to the process. Just how much he is contributing is difficult to say, but he is making a contribution. That is what we

are doing and shall succeed in doing. For this reason, although the renegotiations themselves are nothing dramatic, it is essential that they should succeed and that they should be backed by this House and the country.

6.44 p.m.

Sir Arthur Irvine: I still feel great concern about the basic issue of public consent and popular consent to the whole proposal of our entry into Europe. I felt somewhat disturbed by what seems to me to have been a breezy assumption throughout this debate that that consent is present or indeed that it will be forthcoming. I am far from sure that that is the case. If one has an honest doubt about the state of public opinion, on a matter of this importance, it is one's duty to declare it in this House.
My impression of the last election was that public opinion was more strongly against entry into Europe than I had expected. If that state of opinion is not reflected in our handling of the issue here, we shall be in trouble. The distrust of parliamentary processes will get out of hand. That distrust took the shape at the last election of a large, forlorn Liberal vote. It was a forlorn vote but it expressed the distrust felt by so many people in our parliamentary processes. Next time, unless we are careful, that vote might assume a more anti-parliamentary shape.
We must have at all costs a genuine and honest reference of this issue to the British people. With Mr. Enoch Powell wailing and howling in the wilderness of Ulster, and with the voices of my right hon. Friends the Members for Ebbw Vale (Mr. Foot) and Stepney and Poplar (Mr. Shore) subdued in office, we must ensure that the public concern on this issue is properly voiced and protected in this House.
In recent days we have heard talk about certain matters having priority in renegotiation. That is the direction which discussion has taken. I feel no objection in principle to that, but I feel the need to be satisfied that the result of so doing will not be to detract from the clarity and comprehensiveness of the question that is to be put to the people in the referendum.
It is said that priority should be given in renegotiation to certain matters— namely to the Community budget, the common agricultural policy, EEC policy towards the Commonwealth and regional policy. It is said that these matters can be dealt with by way of changes in policies in preference to proposing changes in the treaties themselves. That is how the matter has been put, and it needs careful watching. One has to be careful not to introduce something that will blur the issue which many Labour Members insist shall be put to the nation.
It is the larger questions of economic and political union and those relating to the powers of this Parliament that matter. These are the questions which create the greatest public anxiety. I do not underrate the importance of the matters to which it is said that priority in renegotiation should be given, but the larger questions of economic and political union are what the people are worried about. We shall make a mistake if we underestimate the worth and quality of opinion on issues of this scale when they are expressed by the British people. It would be the biggest mistake of our lives if we adopted such an attitude.
We must be told whether these larger matters can be dealt with by changes in policies or whether they need something more. On which side do they lie of the line dividing changes in policies from changes in the terms of the treaties themselves? We cannot usefully have a referendum on only part of this vitally important issue. It must be "Yes" or "No" to the whole question of joining Europe. We cannot take it bit by bit. We cannot have a "neverendum" instead of a referendum. The public will not put up with that situation. The British people feel that they have been pushed around too much already and they want this vital question put to them and put to them straight.
I wish to emphasise that it is in the interests of both sides of the controversy that this issue should be put to the people as a whole with clarity. The pro-Europeans among us must recognise the importance of consent being clear and that they gain nothing by flannelling this or any other issue. The people must decide knowing what diminution of status, power and influence of the British Parliament is proposed, if any. They must

make their decision knowing whether a further encroachment on our common law is proposed and whether our judges will have to interpret not only statutes of the British Parliament but also enactments of the new Community law transmitted in eight different languages. All these matters must be comprehended and their significance understood if any reference to the people is to be worth while and if any referendum and the result of it are to have weight.
For my part, I will accept the decision of the British people on this great issue. In many respects it is a narrowly-balanced issue. But there must be a clear answer to a clear question. The choice must be spelt out honestly. On a matter of this scale of importance, we must have done with the miserable business of being all things to all men. We must avoid the over-cleverness which is so closely akin to stupidity.

6.51 p.m.

Mr. John Davies: I want first to take up some remarks made by the Foreign Secretary about the Committee which has now taken on the arduous task of scrutinising the vast amount of work coming through in the forms of proposals and papers from the Community. In doing so I pay tribute to Sir John Foster and his Committee who were the original authors of this formula and system and whose recommendations have very largely been accepted by the Government.
I want also to thank the Foreign Secretary for his words of support. From my very initial encounter with the work that the Committee has to do, I know that all the members of it feel that they will need the most active support both of the Government and of the organs of the House of Commons if they are to cope with the immense task with which they are faced.
There are at the moment some 200 outstanding proposals for legislation with which the Committee will have to deal and upwards of 100 other documents comprising consultative statements and the like. Very many of them constitute matters of first-rate importance to the House. I think the House knows that throughout, both when I was a member of the previous administration and now, I have always been anxious that the


House should have opportunities to discuss and debate these matters. I am glad that we now have this possibility.
Reverting to the main topic of the Foreign Secretary's speech, it may appear a little provocative in today's conditions to offer him my compliments. They are comparative only. I compliment the right hon. Gentleman on the translation of the tone of his remarks to the Community from the somewhat overbearing and truculent ones which appeared to be contained in his statement of 1st April to the much more winsome remarks in the right hon. Gentleman's interesting and long document, which I have had the opportunity to study in the greatest detail.
In order to respect your injunction to hon. Members to be brief, Mr. Speaker, I do not intend to go over the whole of that wide-ranging paper or to repeat what has been said already: that to a large degree the elements of renegotiation were matters already within the negotiating procedures of the Community. There is remarkably little difference from the kind of work with which I was customarily engaged when I had that responsibility in a variety of different forms within the Council of Ministers.
There are, however, certain differences and they are differences to which I wish to make brief reference. The Foreign Secretary sets aside—this has been repeated with different nuances by hon. Members on both sides of the House— questions of economic and monetary union and political union. They are issues with which the right hon. Gentleman will have to deal separately, and the implication of the reports of his meeting yesterday is that he at least does not subscribe to the principles of these objectives.
There is a difference here. Those of us who have been actively involved in the pursuit of our membership of the Community are definitely committed to the principle of economic and monetary union and to the principle, implicit in that union, of a European union with a time limit fixed to it. There is, therefore, that substantial difference. To a degree, however, it is a distinction without very much difference.
Every step along the path to that ultimate objective has to go through the mesh

of agreement and consensus to which reference has been made already. Every step has to be argued out and, in our present context in this House, has to be argued out after having had the benefit —if it be such—of being scrutinised previously as to its relative importance to the affairs of the country. So I do not think that the difference, which seems substantial, is really so substantial.
The previous administration believed, and I still believe, that to be engaged in a great venture without having an avowed objective and purpose, with something at the end of it to which we are committed, is seriously to undermine the purpose with which we attack the problems that we hope to solve. So I make no excuse for maintaining my commitment.
In the four main areas to which the Foreign Secretary referred, again there are certain nuances of difference. There is first the contribution to the Community budget. It is clear that we would have preferred to be able to put forward firm proposals based upon the assurances to which my right hon. and learned Friend the Member for Hexham (Mr. Rippon) referred, the impossibility for the Community to conceive of a situation in which circumstances had arisen which were so adverse to a member country as to create great difficulties, and the Community's assurance that in those circumstances the necessary redress would be forthcoming. We prefer to rely on that kind of argument.
The Foreign Secretary prefers to rely on some revision of the formula itself, if he can attain it, which at this stage must be based upon little more than "guesstimates". There is a vast area of differential which can be arrived at in working out these matters, and the work that the Commission has been called upon to do will demonstrate the wide range of the brackets within which these matters can be assessed. There is here, therefore, a wide difference.
In terms of the common agricultural policy, a great deal has been said already of the matters that were under discussion. My right hon. Friend the Member for Grantham (Mr. Godber) was deeply involved in them, and I think that there is very little difference between the objectives which he hoped to attain and those


to which reference is made in the Foreign Secretary's paper.
However, there is some difference in the apparent regime envisaged in the right hon. Gentleman's paper and the very basis of intervention as a means of ensuring the continuing support of agriculture. Some real concern has been expressed about the right hon. Gentleman's aspiration towards some kind of differential pricing between countries. Our own farming community will see it as the thin end of the wedge, the objective of which is to keep our farmers at comparatively low levels of remuneration, and one fear is that this will result in an even further erosion of the confidence of the farming community, which is so important at present.

Mr. Hamish Watt: Does not the right hon. Gentleman agree that the CAP is so diametrically opposed to the interests of our farmers as to be quite ridiculous? At present, when we should be stimulating our dairy trade instead of cutting its throat, the CAP is going the other way about it and asking our dairy farmers to go out of milk production. Surely the CAP is so diametrically opposed to our interests that we must give it up.

Mr. Davies: That may well be the hon. Gentleman's view but it is certainly not the view of the National Farmers' Union, which holds the diametrically opposite view.
On trade and aid matters there is not a jot of difference. There is the intention to bring forward somewhat the Protocol 18 discussions about New Zealand, but the Foreign Secretary would be fooling himself if he imagined that as a result of that he is to have access to a wide range of cheap foodstuffs from the Antipodes. That is unlikely. However, this is a modest change. As for the rest of the aid matters, whether they be sugar, Protocol 22, the General Scheme of Preferences, or other matters, including Mediterranean matters, which have been going on for so long, there is little or no difference between what the Foreign Secretary seeks and what we were seeking in our negotiations.
On regional industrial matters there are some differences. I was concerned to find very little in what the Foreign Secretary had to say on 4th June which

was a direct determination to move ahead with the creation of a Community regional policy. I say that from the point of view of not only our own interests but also those of the Community itself. It seems to me that the Community should be moving forward into wider fields of policy, and the regional policy was one of them.
I am concerned too, in the same matter. lest the Foreign Secretary's insistence upon ensuring that we have a free hand to deal with our regional problems should weaken his resolve to support the Corn-unity's search for some general control of regional aids. The House will well realise that if the Foreign Secretary's forward estimates were right and if we are to see a very serious deterioration of our relative prosperity in relation to that of the Community, an enormous importance resides in trying to ensure that there should be adequate control on these regional aids, otherwise the more wealthy countries will simply outbid the poorer countries for investment projects. I hope that in regard to that matter the Foreign Secretary will take those points carefully into consideration.
As regards the general problem, the Foreign Secretary has lumped together a whole series of different things, most of which were in course, and he has presented them as a renegotiation package. I do not blame him for that. That was implicit in his manifesto undertakings. I do reproach him, however, for the manner in which it was done. The throwing down of the gauntlet, which seemed to be the case earlier in the year, followed by what at least some people seem to imagine at present as a throwing-in of the towel, was a very damaging blow. It hit both our own interests and those of the Community at the same time.
It hit those of the Community because the Community was then going through great difficulties, and this was yet another added and very serious burden. It hit our interests too, because it has not entirely enhanced the position that we can hold in the Community of Europe. It has weakened our purpose and our contribution. It has weakened it in circumstances of the greatest gravity. I do not know whether people have as yet taken on board in the industrial world generally—or in the developing world,


indeed—the immense consequences involved in the transfer of resources of the nature with which we are being faced over current years. It looks as though we are moving over, on present calculations—which may well be much below reality in the years to come—about 50 billion or 60 billion dollars a year out of our hands into the hands of those who hitherto have had little experience of handling these vast balances of sums.
This really frightening prospect has great dangers for the world because it deprives the industrialised countries of the very means of investment which they so much need to ensure the future. It holds out great threats too, because the use of the monetary forces involved in these transfers is such that it can gravely threaten the monetary stability of individual countries and, indeed, whole systems. We are approaching something of an unknown situation in the economic problems of the world which will in their turn be increased by the natural tendency of individual countries to protect themselves against the inroads of these problems before they consider the impact of their protective systems on others. I am therefore very anxious about the prospect that the next years will face us with problems of a most overwhelming and difficult time in economic terms.
It is just at this time that the countries which will manage either to survive or to contribute to the survival of others will need to be both strongly productive countries themselves, essentially countries armed with massive reserves, and able and willing to move forward in the displacement of the energy problems they are now facing. I do not believe that individual countries of Europe have that capacity. In order to overcome the very major difficulties with which they will be faced, they have an absolute need to concert their plans in this regard and to contribute from their respective wealths towards the safeguarding of not only their own continental interests but those of developing countries which are still harder hit.
At present, therefore, with these problems so close on the horizon, to have in any way jogged the elbow of the Community—perhaps more; to have rocked the boat of the Community—was un-wisdom itself. I hope that the conversion

that 1 detect in the present documents is evidence of the realisation of the Foreign Secretary that this is so.

Mr. Deputy Speaker (Mr. George Thomas): Mr. Norman Atkinson.

7.7 p.m.

Mr. Norman Atkinson: Mr. Norman Atkinson (Tottenham) rose—

Mr. Arthur Lewis: On a point of order, Mr. Deputy Speaker. I have been a Member of the House for long enough to know that one never criticises the Chair. I am not doing that now, but I should like to ask for an explanation. It has always been my belief that the Chair tries as far as possible to give preference to Privy Councillors when they rise to speak. That has been the position today. But I have noticed that my right hon. Friend the Member for Jarrow (Mr. Fernyhough) never seems to gain this privilege. May that matter be looked into?

Mr. Deputy Speaker: Order. I think that the hon. Member may assume that whoever occupies the Chair tries to be fair as far as possible. Mr. Norman Atkinson.

Mr. Atkinson: The right hon. Member for Knutsford (Mr. Davies), speaking on the radio recently, said that Western capitalism was heading for the precipice. He said that as a result of that it was necessary to strengthen the Communities and our role within the European Community and, in particular, our position within the Commission. I take it that that was the point he was making—the strengthening of the whole situation and our economic relationship with Europe as a whole. I want to take up that question and one or two of the remarks made by the hon. Member for Saffron Walden (Mr. Kirk). It is a pity that he has left the Chamber, because he would have been able to tell the right hon. Member for Knutsford that it was precisely because of the facts outlined in his analysis of Western capitalism that brought about the Common Market, and that would have given him adequate explanation of some of the queries that he seemed to pose in his remarks about the Communities.
I want to deal with three of the matters raised during the speech of my right hon.
Friend the Foreign and Commonwealth Secretary and some of the objections of some of us on the Government benches to the position which now seems to be taken up by the Labour Party. We seem to be at political variance with many of the recent decisions alleged to have been taken collectively by the Cabinet on these matters
The first issue is the diminution of this country's sovereignty. We have spelt out three matters which are important in this regard—capital movement, import restrictions and competition policy as practised within the Community. We have had what has been described as a very modest approach by my right hon. Friend the Foreign and Commonwealth Secretary. Earlier this year my right hon. Friend the Chancellor of the Exchequer made a speech in which he said that there were restrictions on capital movement, and that he had reversed the policy enunciated by the previous Chancellor—the right hon. Member for Altrincham and Sale (Mr. Barber). But the point is that it is a temporary reversal. It is generally recognised that it is in conflict with Article 108, and it is acknowledged that at the end of the year whatever limited restriction is placed on the movement of capital will disappear. From the end of the year, such movements will be completely free. That is of great concern to many of us, because the outflow of United Kingdom capital to the EEC countries is increasing monthly.
The last accurate Government figures to be published were for 1971, when it was suggested that the amount involved, excluding oil, was £267 million. It is estimated that in 1972 it rose to £950 million, and I am told that for 1973 we can expect the figure to be about £800 million. We can see what is likely to happen to the outflow in the future.
The right hon. Member for Knutsford knows full well that the major British manufacturers will want to export much more of their capital in the years ahead than they have so far. That is a serious problem for the British Government if they are serious about wanting to maintain democratic control over our economy. The right hon. Gentleman knows the size of the likely figures for this year and next year. We need rigid control if they are to fit in with the policies outlined.
With our balance of payments deficits being what they are, we are in a position similar to that of Italy. If the Commission is prepared to allow some flexibility to Italy, the same may apply to us. If my right hon. Friend the Foreign and Commonwealth Secretary agrees with some of the Commission's conclusions and the measures it believes should be taken for the Italian economy, does he believe that they should apply here? If he is prepared to accept that kind of advice from economists attached to the Commission, and the recommendations they are about to make for Italy, does he think that we should be hamstrung in a similar way? I am certain that he will not carry the majority of Labour Members if that is the basis of the proposals he will have to make to correct our balance of payments deficits.
The Common Market competition policy is in direct contradiction to what we have said as a party. Is my right hon. Friend opposed to the concept of monopsony, such as we have set out in our policy for aircraft manufacture, gas production and so on? If he is saying that we are not entitled to practice monopsonic policies, he must recognise that there are conflicts. Someone is telling lies about the matter. We say clearly in our policy statement that we do not wish to allow foreign competitors to move into certain areas where we want a democratically-controlled State monopoly. That is our purpose as Socialists, and it is in direct conflict with the treaty. Therefore, we have fundamental objections to the idea that we can accept the treaty in total.
I return to my right hon. Friend's speech and the matters that alarm us. To me, it represents a tremendous shift from the mood and the feel of his 1st April declaration. There was some cheering on this side of the House when that declaration was made, but I believe that since then the Foreign Office has got to work, and my right hon. Friend is yet another victim in a long line of casualties who have suffered as a result of the treatment meted out by the Foreign Office. My right hon. Friend may well go down in history as one of the best Foreign Secretaries we have suffered over the centuries, as has been suggested by the Opposition. I do not want to detract


from the accolades which have come from the Conservative benches, but I am worried by the shift in policy and what is alleged to have happened in the Cabinet.
The Leader of the Opposition has seemed to object to the fact that a document prepared by my right hon. Friend the Secretary of State for Industry somehow found its way into the National Executive of the Labour Party. The right hon. Gentleman thought that it was wrong that papers should be submitted in that way. He felt that they should come through the House. On that point I believe that there is a great weakness in the British Labour movement. There are gaps in our democratic practice. My right hon. Friend the Foreign and Commonwealth Secretary wears three hats, being not only a Minister but Chairman of the Labour Party and its Treasurer. He has to decide which hat he will wear at which time.

Mr. James Callaghan: So that is what the speech is about.

Mr. Atkinson: My right hon. Friend may continue to make his comic remarks, but he is custodian of conference policies. Like many other members of the Labour Party, I would expect my right hon. Friend to be serious in that function as chairman of the party. I am surprised that, as chairman, he has never discussed the speeches he made on 1st April and 4th June, both of which are landmarks. Major statements of policy have never been discussed by the National Executive of the Labour Party or by a monitoring group specially set up by the NEC. I believe that my right hon. Friend refused to submit any papers to the NEC. That represents a weakness in our democratic practice and what we should like to see existing between the Labour Party at its National Executive level and the Labour Party when in government and represented by my right hon. Friend.

Sir Alec Douglas-Home: What the hon. Gentleman is telling us about the Labour Party is very interesting, but will he turn his mind to the interests of the country for a short time?

Mr. Atkinson: Yes, but the Labour Party happens to be part of the country. It is an integral part of our democratic system, just as the Conservative Party is an integral part of our political system. If we are to talk about the wholehearted consent of the British people, that must involve the political parties, if our political system depends on the kind of organisation we have come to recognise.
It seems strange that the Foreign Secretary, as Chairman of the Labour Party, has never consulted the Labour Party about a major statement of policy which purports to represent the party policy. The second feature about the shift between 1st April and 4th June is the setting up within the Cabinet of a European strategy sub-committee. This is an interesting arrangement. I am told—not directly by members of the Cabinet— [Interruption.] I am being very honest about that. I am not told directly by members of the Cabinet, but it is common knowledge that this statement to which I have referred has not been collectively discussed in the Cabinet.
It was submitted as a series of papers to this strategy sub-committee set up by the Cabinet. In my opinion, apart from what is happening in Europe and the effect of the Commission upon our so-called power-sharing arrangements there is a diminution of democratic practice in this relationship between the Labour Party and the Cabinet. We are now getting élite policies.

Mr. James Callaghan: I do not know which of the hobgoblins I should try to disperse. I shall certainly not discuss the Cabinet. As for the Labour Party, perhaps I can tell my hon. Friend that it was I who proposed, from the chair, that there should be this monitoring committee. It was my idea that we should keep these matters under review. It is quite untrue to suggest that I have not been willing to submit papers. The general tenor of my hon. Friend's remarks is as completely inaccurate as was his earlier comment, some weeks ago, that I was called to Windsor Castle to assist in the formation of a coalition Government. These remarks today are just about on a par with that rubbish.

Mr. Atkinson: I do not want a party debate on these matters. However, I


remind my right hon. Friend that it was he who told me that he was going to Windsor Castle—

Mr. Deputy Speaker: Order. There are so many hon. and right hon. Members who wish to speak that it might be advisable to leave Windsor Castle for the time being.

Mr. Atkinson: 1 find it a little incomprehensible that a right hon. colleague of mine should say that it was I who set about the idea that he had gone to see the Queen to discuss the formation of a coalition Government. Nothing of the kind. It was he who told me about this. I have no knowledge of his movements.
We are deeply concerned about this shift. I am sorry to have prolonged what hon. Gentlemen opposite have called my interesting remarks. I believe that they are germane to the argument. We are committed to a referendum, and I remind my right hon. Friend of the origin of the phrase which he quotes in the party document. We have taken the trouble to reproduce this in the Notice Paper because that was the only way we could get down a statement on policy. The statement says that in view of
the unique importance of the decision"—
that is relating to the whole question of our position in the Community—
the people should have the right to decide the issue through a General Election or a Consultative Referendum.
My right hon. Friend knows only too well that had it been convenient to devise some mechanics whereby a referendum could have been combined with a General Election we would have done so. That was the origin of this. There must be a Labour Government if there is to be a referendum. The Conservative Party has already said that it would not allow a referendum because it is not part of its policy. The commitment is loud and clear. If there is any going back on that there will be serious discussions in the Labour Party.
My right hon. Friend says that he is honest and straight in his approach, and I totally accept that. We must be honest and straight about our promise to the British public that we shall allow them to say "Yes" or "No" on the question of continued membership of the Community. That can be done only through

a referendum. We ought to make it clear to everyone that the Labour Party, if elected in October, or whenever the election may come, is 100 per cent. committed to the idea of a referendum.
If the recommendation to accept is to be based on the outcome of the negotiations and is not to do with the treaty, a Labour Government will obviously recommend continued membership. The outcome of the discussions will undoubtedly be successful. It cannot be otherwise. We are bound to say that we have succeeded in our attempts to renegotiate, we have reached a compromise, we have saved the nation so much money, and that therefore we are asking the people to say "Yes" to continued membership. That method will have to be challenged.
If we go along the road mapped out by the Foreign Secretary that will be the end when it comes to the referendum. We cannot introduce fresh matters about the inadequacy of our Community relations or the question of the treaty. We should be talking only about the outcome of the renegotiations. Many of us stick on this because the treaty is at variance with our requirements for the creation of a Socialist policy. Many of us passionately believe in the need to transform society. We do not believe it is possible if the treaty remains intact. Yet my right hon. Friend raised no objection—he agreed—to the terms of a statement put by the right hon. Member for Chipping Barnet (Mr. Maudling), who said that accepting the treaty without amendment and accepting Community regulations and directives with consequent loss of sovereignty was now the position of the British Labour Government.
The Foreign Secretary did not object to those words. If there is no objection forthcoming our suspicion that there has been a shift in the Cabinet and in our leadership is confirmed. If, as the British Labour Party, we accept the treaty without amendment throughout the negotiations and the period leading up to the referendum and accept that we are obliged to obey Community directives with consequent loss of sovereignty, matters have altered. If that is now our position it is a long way from the conclusions which I believe we reached at our last annual conference, when we endorsed the 1972 statement. That is what worries my hon. Friends and I most, and


why we shall have to have some straight talking about where we now stand and the direction which is now plotted for us by the Foreign Office and others who support its line.
I do not want to detain the House any longer—[HON. MEMBERS: "Hear, hear."] Hon. Members on the Opposition benches may say "Hear, hear", but some of these matters are of vital concern to our whole function as a political movement, because I believe there should be absolute honesty and consistency in the things we say and do and in the way in which we behave in this House. I agree with my right hon. and learned Friend the Member for Liverpool, Edge Hill (Sir A. Irvine), that people are becoming afraid of this place because of its inadequacy, because there is a loss of honesty and because it no longer seems what people thought it once to be. We have to restore that credibility. We have to tell people openly and as honestly as we can just where we stand. We have to tell the British Labour movement that the conclusions it reached at its annual conference are the guidelines which set the direction we must follow as individual Labour Members of Parliament.

Mr. Deputy Speaker (Mr. George Thomas): We have one and a half hours left for back benchers' speeches and 20 right hon. and hon. Members wishing to speak. I urge hon. Members, therefore, to think of their colleagues.

7.33 p.m.

Mr. Russell Johnston: I shall be brief. What we are witnessing is not really a fundamental renegotiation of the treaty by the British Government with our other partners in the Community but a fundamental renegotiation within the Labour Party of its attitude to Europe. Virtually the whole of the Foreign Secretary's speech was very much directed at his back benchers rather than at the House as a whole. This seems to me to be a very dangerous game to play and to present a very dangerous situation and is very depressing in view of the enthusiasm with which the progressive elements in the Community welcomed our entry and looked to us to give the EEC new impetus.
There are four aspects with which I wish to deal. I start with the four items which the Foreign Secretary mentioned

as the principal questions for renegotiation: the budget, the CAP, trade and aid, and the regional and industrial question. There is certainly no one on the Liberal bench, and I doubt whether there are many hon. Members elsewhere, who would oppose what the Foreign Secretary is seeking to do. It was quite properly said by the hon. Member for Saffron Walden (Mr. Kirk) that in effect we are seeing not fundamental renegotiations but on-going renegotiations which would have taken place in any event but which have been given this somewhat special title and emphasis which have had other unfortunate effects, as the right hon. Member for Knutsford (Mr. Davies) cogently pointed out.
Therefore, it is not what the Foreign Secretary said that is interesting but rather what he has not said. In particular, economic, monetary and political union were not really dealt with in the second Luxembourg speech. I recollect that the Foreign Secretary intervened during the speech of the right hon. Member for Chipping Barnet (Mr. Maudling) to say that he could not go on repeating everything all the time, but it is interesting to note what he actually said in Luxembourg on this question. He said:
There is a fifth question about the future of economic, monetary and political union to which added point has been given by recent events which have affected individual members of the Community. We discussed these matters at our recent meeting … I shall not pursue them today, except to say that as I understand it, the position on these matters is that a great deal of further work and discussion will be required before any further decisions can be taken in pursuit of these general aims. We are very ready to continue with these talks in order that we can all elucidate, in a constructive spirit, what content it may be possible to give to them.
That last sentence is splendid and mystical and it is difficult to see what it means, but if" constructive "means anything it presumably means that the Government very much accept—much to the annoyance, I would have thought, of hon. Members like the hon. Member for Tottenham (Mr. Atkinson)—that economic, political and monetary union are desirable and necessary aims of the Community.

Mr. James Callaghan: It would indeed be boring if I kept on repeating everything. I have already said to the right


hon. Member for Chipping Barnet (Mr. Maudling) that he should read paragraph 6, and I now add paragraph 7, of my speech in Luxembourg of 1st April. If the hon. Member will not read it, perhaps he will allow me to do so in order that he will not have to pursue this hare. I said:
Economic and monetary union … a rigid programme including fixed parities … dangerously over-ambitious: over-ambitious because the chances of achieving by 1980 the requisite degree of convergence of the rates of growth of productivity and wages rates, of investment and savings, seem to us to be very small: dangerous because of the impossibility for any country, particularly a country with a relatively low growth rate, to manage its own economy efficiently and provide for full employment
and so on;
much new thinking is going on in the Community on the subject".
I then used another phrase:
intention of transforming the whole complex of the relations of member states in a European Union by 1980. What does this mean? Is it to be taken literally … change which is quite unrealistic and not desired by our peoples, certainly not by the British people.
How much clearer must I be than that?

Mr. Johnston: The Foreign Secretary may be trying to persuade us in his persuasive fashion that there is no difference in emphasis as between the two Luxembourg speeches, but objective observers would note the change in tone and would indeed note the change in tone as between the part of the speech I read out and the part which the right hon. Gentleman read out. I am worried that the Labour Party is liable to box itself in. The Community, I believe, is meaningless in the long term unless there is a movement towards political, economic and monetary union. If those do not come about, there is no point in going on with the EEC. I was seeking to elucidate precisely what was the Foreign Secretary's view, while I understand his difficult political situation.
Perhaps I may quote someone else, not a Liberal, whom I heard speak in the European Parliament last November, because the third point I would make about the Foreign Secretary's speech is that it lacked vision. What is the right hon. Gentleman's vision of Europe, his concept of where we are going? He said that we now had Schmidt and Giscard d'Estaing and that things would be more

practical and less romantic, although that was not his word. The great politician in question said:
The goal is clear. It is, as I have put it from time to time, a sensibly organised European government which in the fields of common policies will be able to take the necessary decisions and will be subject to Parliamentary control. The European states will transfer to that government those sovereign rights which in the future can only be effectively exercised together; the remaining rights will stay with the member states. In this way we shall both preserve the national identity of our peoples which is the source of their strength, and add the European identity from which fresh energies will ensue.
That was Willy Brandt, the then Chancellor of West Germany. The vision of his speech was conspicuously absent from the Foreign Secretary's comments.
My third point concerns the total absence of any reference to democracy and the democratisation of the institutions of the Community. It would appear to me that it would be something which the Labour Party, and a Socialist Party for that matter, would naturally be in the van in advocating, and I do not understand why this is not so.
The Foreign Secretary earlier spent some time posing questions to the right hon. and learned Member for Hexham (Mr. Rippon), but I should like to pose a question to the Foreign Secretary. He said during his speech that he did not know how the negotiations would end— they might end successfully or they might not. A number of hon. Members have pointed out the various alternative options—the enlarged EEC or the enlarged EFTA which the right hon. Member for Battersea, North (Mr. Jay) was advocating, and which was effectively contested by the right hon. Member for Chipping Barnet. [An HON. MEMBER: "NO."] This is a matter of opinion, although in my view the burden of opinion is in one direction.
There is also the question of the Commonwealth and of the special relationship with the United States. I should like to know the Foreign Secretary's view on what alternative policy Britain will have if the negotiations fail. That is a fair question to ask. If there is to be a posing of questions to the British electorate it will be not only a question of whether we are to stay in. The question of what happens to us if we do not stay in is equally pertinent.
Finally there is the question of consultation. I am not, and my party has not been, in favour of a referendum, but it seems more than likely that a referendum will take place since the Labour Party is well committed to it. I cannot see how on earth there can be a General Election on a single issue. A General Election takes place on a multiplicity of issues and it is impossible to isolate one and claim that it is a clear definition. If we have a referendum, what will be the justification for it? It will presumably not be, despite the early day motion relating to this, a consultative referendum. Presumably it would be mandatory, otherwise there would be no point in having it. Presumably the justification for a referendum is that it relates to a special constitutional question and therefore requires special constitutional treatment for which no precedent has been set. I am, for instance, interested in the future of the Kilbrandon Report, in devolution and in changes in the internal constitutional situation within the United Kingdom. Such would logically also be a proper question for a referendum. There is the question of reform of the electoral system of the country. That is a constitutional issue.
The more I think of it, the more it appals me that hon. Members in the House prate about participation and about consulting the public and ignore the gross injustices of the electoral system. The right hon. and learned Member for Liverpool, Edge Hill (Sir A. Irvine) talked about the forlorn Liberal vote at the last election. Six and a quarter million people, because of the obvious injustices of the electoral system, were effectively disfranchised. Members must get the whole question clearer in their minds.
While we on this bench will certainly support the achievement of a fairer adjustment of terms, which is essentially what the Foreign Secretary is talking about, we remain deeply disappointed at the lack of evidence of determination to build a more effective, a more egalitarian and a more democratic community and at the failure of the Government to give their support to those who seek furtherance of these aims, which are those on which we should be concentrating.

7.45 p.m.

Mr. David Marquand: You appealed for brevity, Mr. Deputy Speaker, and therefore I shall not begin my speech with quite as many bouquets to my right hon. Friend the Foreign Secretary as I had originally intended. I shall simply content myself with saying that the statement of aims which he put forward in Luxembourg was admirable. It is nonsense to say that it was out of line with Labour Party policy—it was not out of line with the policy on which I fought the last election. Furthermore, the statement of aims which my right hon. Friend put forward in the House this afternoon was also admirable.
But in negotiations of such complexity, it is not enough to have the right aims; it is also necessary to have the right approach and the right method. I am not yet entirely sure whether my right hon. Friend has the right method and the right approach for the negotiations to succeed.
There are two possible ways in which this country could pursue its aims in these negotiations: it could choose the method of what might be called British Gaullism or the method of what might be called Community solidarity. The method of British Gaullism would involve fighting hard for British interests exclusively and arguing the case solely in terms of British interests. The method of Community solidarity would involve fighting no less hard for British interests, but in Community terms which the other members of the Community would be likely to accept and endorse.
I believe that the first method—the method of British Gaullism—would be a recipe for failure. We must understand that in these negotiations we are in a much weaker position than the French were under President de Gaulle. In these negotiations we are asking essentially to pay a lower share of the Community budget. This is right, but it means that the other Community countries are being asked to pay a higher share. There can be no possible escape from that; it is mathematically self-evident.
If we fight our case solely in terms of British national interests the other countries in the Community will be entitled to fight their cases in terms of their national interests and we shall find


great difficulty in reaching a successful conclusion. It is therefore essential to adopt the second method—that of what I call Community solidarity, if the negotiations are to succeed.

Mrs. Gwyneth Dunwoody: Will my hon. Friend tell me where we have seen this demonstration of Community interest and solidarity in the past 12 months?

Mr. Marquand: I said that I wanted to be as brief as possible, and my hon. Friend has raised a big question. I agree that the Community has not demonstrated much solidarity in the past 12 months. This has been a great disappointment to me, as I voted in favour of entry to the Community. But one reason is that the previous Government were far too Gaullist in their approach to the Community. That is one reason why effective energy and regional policies were never developed. It would be a tragedy if we were to conclude that because the Community now lacks sufficient solidarity a British Labour Government should therefore make the situation even worse, as my hon. Friend seems to have suggested. We must couch our argument in terms which the other members of the Community can accept. That means, if it does not sound too cynical, that at the very least we must pay lip service to the ideal of European unity. It is, in a way, a rather muddled, metaphysical and vague concept. I understand my right hon. Friend the Foreign Secretary with—I was about to say, his English pragmatism, but that would be insulting a fellow Celt and so I should say with "his Celtic pragmatism"—being slightly put off by the misty and vague language sometimes used by our partners in the Community when speaking of these matters. But if we fail to recognise that beneath that fuzzy language there is a deep and passionate desire on the part of millions of people for a better life and for a more international method of settling problems, we shall outrage strong feelings among our partners and we shall be that much less likely to achieve our own national purposes.
The second corollary of pursuing the method of Community solidarity is that wherever possible we should seek to rectify the injustices that we feel to exist

in the present arrangements in ways which will strengthen the institutions of the Community rather than weaken them or even leave them where they are. It cannot always be done, but in some areas it can. One of them is regional policy and I was disappointed and surprised that the Foreign Secretary's statement in Luxembourg did not lay greater stress on the need for a large regional development fund. That would, in practice, mean a smaller net burden to this country and it would also strengthen the Community's institutions.
If we argued in this way, our partners —certainly the Socialists in the Community—would find it difficult to oppose us in terms of their own proclaimed beliefs and principles. This is not just a good negotiating tactic; it also happens to be right. If the Community remains as it mainly is at present—nothing but a customs union with a common agricultural policy tagged on to it—it is this country which will suffer most. A mere customs union will simply make the richer areas more prosperous and the poorer areas relatively less prosperous.
It is the least prosperous areas of the enlarged Community which have the most to gain from a strong Community, able to follow interventionist policies designed to correct national and regional inequalities. I should therefore like to see— and in spite of the disappointments of the last few years, there are still people on the Continent who feel this too—a Labour Britain acting as the accelerator rather than as the brake in the drive towards greater European integration.
I am also not quite sure that the Foreign Secretary has fully appreciated —that sounds very patronising, and I apologise for the way I put it—the implications of withdrawal for this country and for the world. I can understand that it would be impossible for him to negotiate in Brussels and say, "I think that withdrawal would be a disaster". He cannot say that publicly in the negotiations—it would not be reasonable to expect him to do so—but when this is put to the British people, in whatever form, it will be essential not only that the Government take a firm view on the position—I was glad to see that the Foreign Secretary committed himself to that in his Luxembourg speech—but also that they should tell the British people


what they see as the costs and consequences of withdrawal for us and for the world.
It is a fantasy to think that we can somehow create the industrial free trade area which the right hon. Member for Chipping Barnet (Mr. Maudling) failed to get nearly 20 years ago. That is a mirage. Not only would it be catastrophic for this country if the negotiations failed and we were to withdraw; more important, it would be catastrophic for the Western world. We have taken for granted for 25 years a degree of stability and prosperity in the Western world such as has never been known before in history. We cannot take that quite as much for granted in future.
The Western world is now facing much more acute problems than it has ever faced, certainly since the death of Stalin. If this country were to withdraw from the Common Market—inevitably in an atmosphere of recrimination and failure—the bitterness that would be bound to follow could only encourage the most ugly, dangerous and inward-looking forces, not only here but throughout Europe and the West. We would pay—the whole world would pay—a heavy price.

7.55 p.m.

Mr. Roger Moate: The hon. Member for Ashfield (Mr. Marquand) maintained that it would be catastrophic if Britain withdrew from the Community. Other hon. Members have said the same, but they have adduced not one scrap of evidence in support of such an allegation. There is a general view that if the negotiations were so successful as to transform the nature of the Community that would command general support. However, if they fail, Britain outside the Community is likely to thrive and prosper as much as if it were inside it.
How could it be catastrophic to withdraw from a community which is earning us a trade deficit at a rate of £1,600 million a year, which will impose upon us a massive burden, across the exchanges of several hundred millions a year, a community which imposes on us a grossly inefficient agricultural system, the burden of which is likely to grow with the years

as the world food situation alters? No one has produced one scrap of evidence to suggest that Britain would be seriously and economically disadvantaged if we were to withdraw.
The only point which is frequently made is that the Community would immediately erect against us the tariff barriers that it has been in the process of reducing. If that is people's judgment of the protectionist nature of the Community, one wonders whether it is the sort of association to which we want to belong. But even that presupposes that the tariffs are really significant. At the time of our entry, the average industrial tariff of the EEC against this country was 8½ per cent. That has now been reduced to about 5 per cent. When we compare that 3½ per cent. reduction with, for example, the effect of devaluation on our competitive position, it becomes clear that the tariff itself is not significant.
If it came to withdrawal, I do not believe that the Community, our European partners—that is what they are and would remain—would resort to protectionist measures which would be just as damaging to them as to us. So the momentum to free trade, either through a negotiated withdrawal or through the GATT negotiations, would remain and would ensure that this country would continue to trade across the world. It is upon world trade, after all, that we depend.
I was particularly glad that the Foreign Secretary commented on Parliament's powers over European legislation. I welcomed what he said about the scrutiny committee, but I wonder whether he is right to be satisfied with the powers that exist. Could he not see whether we could tighten up these matters even further? As I understand it, Commission regulations are automatically binding from the moment that they are issued—possibly even before that, in some obscure way. There is no way in which the scrutiny committee can intervene to prevent that legislation being automatically binding in this country. This is a matter on which the House should be reassured.
We know, too, that that committee is heavily burdened and that it is unlikely to be able to scrutinise all these matters of major importance. Even the most ardent Marketeer apparently does not object to


the scrutiny committee being able to intervene in the legislative process. I should have thought it a much greater security for the House if it could by resolution ensure that no Community legislation had any effect in this country until it had gone through our normal legislative channels. That is surely a resolution that would command universal support and would be a helpful guideline, and possibly more than a guideline, to future Parliaments.
The Foreign Secretary referred to the Luxembourg agreement or accord and the insistence that there should be the unanimity rule in the Council for Community decisions. He rightly places great stress on that matter as one of the safeguards for this country, as did my right hon. and learned Friend the Member for Hexham (Mr. Rippon) and previous Conservative Ministers.
It is all very well to place such dependence upon that agreement, but it is not part of the treaty. It is not a rule. If we regard it with such significance then we should seek an amendment to the treaty to ensure that the unanimity rule remains intact. Only today Sir Christopher Soames is reported as calling for an end to the practice of unanimity in Council decisions. He goes on to explain his reasons.
If the rule is not in the treaty, surely it should be. Although Sir Christopher does not speak for this country or for the Community as a whole, his words are a sign of the pressures that are to come to end the unanimity rule. If we believe that an individual country should be able to protect its national interests, as does the Foreign Secretary, apparently, then let us seek a treaty amendment to establish that that control remains permanent. If such a control were permanent, many of the objections that still remain among many hon. Members would recede.
The Foreign Secretary's last speech at Luxembourg does not meet the full sovereignty argument that he and his colleagues have been proclaiming in recent years. The present Prime Minister, during the last General Election, said:
But worse, it became the law of Britain that any future decision of the Common Market institutions should automatically become the law of Britain, setting aside, repealing statutes which existed for the benefit of the welfare of the British people. British judges would have no choice.

I am sure that the Prime Minister did not believe then that the scrutiny committee would set that right. The sovereignty issue is far greater than that, and it is to that matter that the Foreign Secretary should devote more attention. He should seek to satisfy the arguments that have been put forward from both sides of the House and the arguments which were put forward very strongly in the Labour Party manifesto.
I am not a custodian of that manifesto, but some of my colleagues and I have scrutinised it carefully. We are now talking about an issue on which the British people will make a judgment. They will make a judgment of politicians generally. If there is not a genuine renegotiation I think that cynicism will set in deep in the minds of the British people.
Some of the criticism of the right hon. Gentleman's position has been based on a misunderstanding. It has been assumed that there were two speeches which were totally separate and that the second speech now stands on its own. The right hon. Gentleman has made it clear that his 1st April speech is still the basis of Britain's negotiating position. If that is so, it is a matter of significant importance which makes the general contentment with which the latter speech has been received by certain right hon. and hon. Members seem a little over-optimistic.
The 1st April speech sets out in full terms the Labour Party's election proposals. It goes a long way towards an amendment of the treaties themselves. The right hon. Gentleman retains his 1st April speech as the basis of his case. He has the scope to extend the negotiations far beyond the four points that he made in his latter speech, but whether he has the intention is something which no hon. Member knows, apart from the right hon. Gentleman. To a large extent none of us knows what will happen.
We cannot know how the negotiations will proceed. We cannot know precisely how the French, in particular, will react If the negotiations run into trouble I suspect that it will not be as a result of any of the four points that the right hon. Gentleman has spelled out. Any confrontation is more likely to arise from the apparent unwillingness of the right hon. Gentleman to kneel before the altar of political union, and from what has


been called his agnosticism on economic and monetary union.
Many hon. Members who believe passionately in membership of the Community have said what is absolutely true, namely, that the Community is of little use and value unless it has political will. I would argue that because it is a political decision above all, the British people should have the right to decide. From the tone of the right hon. Gentleman's speech there is no will on the part of the British Government to proceed to a political union, and certainly not even to proceed towards economic and monetary union. The right hon. Gentleman has clearly reserved his position on that.
It is on those matters that the Community will realise that it must decide whether Britain is to remain a member. Some of us have considerable respect for the way in which the right hon. Gentleman has managed to please almost everybody so far, with one or two notable exceptions. It is clear that he has a strong negotiating position. It would not surprise me to find that the Labour Party manifesto, to the displeasure of many of my right hon. and hon. Friends, is honoured in full, and that a referendum will be held. The decision of the British people will then be heard for the first and final time on this subject.
The right hon. Gentleman referred to the harmonisation of value added tax. That is a crucial matter. The relevance of that goes to the heart of almost all other considerations within the Community. It embraces economic and monetary union and the question of own resources. The Foreign Secretary has said strongly that the present Government have maintained that they will not change their position on the zero rating of foodstuffs, but by implication he is accepting that harmonisation of the scope of value added tax, with that exception, will proceed. It is, I think, the sixth directive, with the one amendment that was put forward by the European Parliament and presumably accepted by the Commission, that forms the basis on which hamonisation will proceed.
This is alarming. Is the right hon. Gentleman really saying, with the one exception of zero rating, that henceforth a British Government will accept the control of the Community over the scope of

value added tax? That is accepting an enormous principle. I do not believe that that is the wish of this Parliament. I do not believe that it is desired that the control of taxation should pass from our control.
One interesting matter bearing on value added tax is that we were assured repeatedly that there would be no question of applying it to food. We were told that we were chasing hares if ever we mentioned that matter, yet in March a report appeared in the newspapers entitled:
British victory in debate on Community taxation
The report read:
Conservative MPs in the European Parliament fought hard and successfully today for the principle of zero rating.… It remains to be seen whether British advocacy will prove as effective within the Council of Ministers.
It appears that a threat existed. According to the newspaper report Conservative MPs won a victory in persuading the European Parliament to say that value added tax should not be applied to food. The threat existed, and still exists. That is the situation as it stands under the Treaty of Rome.
We must come to grips with the question of own resources and state much more firmly not just our position on value added tax on food but the broad principle of retaining full and absolute control in this House over all measures of taxation within Britain.
I wish the right hon. Gentleman considerable success. I think that he is playing a skilful hand in his negotiations. We are not sure of the cards that he is playing. That is a sign of great skill. I have a feeling that at the end of the day the hon. Member for Tottenham (Mr. Atkinson) and myself will join in presenting a bouquet to the right hon. Gentleman.

8.9 p.m.

Mr. E. Fernyhough: I take into account your desire, Mr. Speaker, that speeches should be relatively brief. I shall not deal with the speech of the hon. Member for Faversham (Mr. Moate) because with most of his remarks I am in full agreement.
If I had the power to impose penance upon people, I should do so upon a number of Conservative Members. I


should place upon them the penalty of reading the speeches they made when they were trying to sell membership of the EEC to the House and the country. We were told that Britain would have a wonderful blood transfusion immediately we entered the EEC and that the sick nation would be made healthy and strong in no time. Yet, following that blood transfusion administered by Dr. EEC, the victim is weaker than before the treatment was started. It is staggering that there is not the slightest sign of humility among former Ministers of the Conservative Government. They are not prepared even now to say that they made a mistake. They are not prepared to admit that they were wrong. They are still talking about the dynamic potential which will in the future become available to us inside the Community.
That kind of promise is no benefit to a man who is dying. Britain was told that if she took this treatment she would become vigorous, strong and healthy. We have had the treatment and we are beginning to see some of the consequences. I wish that those who supported British entry so vigorously would recognise what membership has done for Italy, which has been in the EEC from the start. Why should membership work for us if it does not work for Italy? What problems are there in Italy which are so different from those in Britain?
During the General Election the great cry from the Conservative Government was "Who rules Britain?" We debated that issue in Jarrow. I pointed out that it was not the British Government or the House of Commons which compelled the British steel industry to put up its prices. The decision was made by the gentlemen in Brussels. Yet we are supposed to be wanting to sell exports. How does putting up the price of our steel help our exports?
Again, it was not a decision by this House or by the British people that, at a time when there was an acute shortage of grain, millions of pounds should be spent on denaturing wheat in Europe, some of it in this country. This was at a time when there was widespread hunger in parts of Africa. We were making wheat unfit for human consumption under directions from Brussels when

that wheat could have fed hungry people. Any action which leads to things like that being done cannot be supported by civilised, thinking people.
At the end of last year, Ministers in the previous Government announced import levies on food which had never before been imposed in this country. We have had to impose them as a consequence of belonging to the "club". How can we defend putting levies on food at a time when prices are rising astronomically and consumption is declining? But again these were decisions made outside this country. Who rules Britain? We could ask that a thousand and one times.
The right hon. Member for Knutsford (Mr. Davies) was going to get a massive regional fund which would compensate us for the money we had to put into the common agricultural policy. Where is it? That again was part of the propaganda of the Conservative Government. They said that there would be a great regional fund which would mean salvation to the North-East. parts of the Northwest, Scotland and South Wales. The regional fund is no nearer than it was when the right hon. Gentleman was talking about it before the election.
We know what happened. The Germans said that they were not going to bale out Britain. They said it again last week. Bonn will not pay to keep Britain in. It is time that we began to talk to the Germans as they talk to us.
An offset agreement was made under the Paris Treaty of 1954. I wonder how much the shortfall is now. In not a single year since the Paris Treaty was signed have the Germans met their full commitment to the offset agreement. I guarantee that the figure involved must now be between £500 million and £600 million in additional cost to British taxpayers. The Germans say that they are not going to pay to keep Britain in the EEC, yet we have been paying them every year since the Paris Treaty money which they should have been paying to this country because it had been agreed that they would pay the extra costs of the British Army of the Rhine. They have not met their obligation in one single year yet. We should be as tough with them in our negotiations as they certainly are attempting to be with us.
Let us look at one final bit of news. Last Thursday The Guardian reported:
The EEC's Ministers of Agriculture agreed late last night to release 17,000 tons of beef for export outside the Community at cut prices. The decision will cost Community taxpayers about £2 million.
How in the name of fortune can we defend the Community exporting to countries outside the Community beef at a lower price than it can sell it to us? It is the system, and it is crazy. Of course the British people must be given a chance sooner or later to express their opinion about it.

Mr. Marten: I am sure that the right hon. Gentleman will be interested in the following extract from a piece of Conservative Central Office propaganda— shall I call it that?—on the Common Market from 1971 onwards. It says:
Next time the prophets of doom"—
presumably people like myself—
start talking about the cost of joining the Common Market, stop and think. Think of what they don't say. Think of the big, big benefits and exciting prospects—for you, and your family.
Perhaps it would be better if we did not take much notice of that. Is it not the case, however, that if we were out of the Common Market we could buy that beef much more cheaply than we can now?

Mr. Fernyhough: The hon. Gentleman is preaching to the converted in addressing me. If we do not agree on many things, we are in broad agreement on this issue.
I come now to a point made by my hon. Friend the Member for Tottenham (Mr. Atkinson). The story was that capital investment would flow like water down the mountainside to Britain if we joined. Dundee was to be made a new city at the expense of Dusseldorf. Of course, we know it has not happened. It has been the reverse. The water has run the other way. No nation intent on having any control of its own destiny can shut its eyes to what has been happening with capital investment. It has been indefensible. Capital expenditure from this country to EEC countries has been 12 times greater than EEC investment in Britain. We were told it would be the reverse.
Unless we make some determined effort to stop that, that will be one of the principles upon which the British people will make a decision. I say frankly that by becoming a member of the EEC, by accepting its laws and by accepting its regulations, we are giving up part of our heritage, part of the liberties and part of the democracy of our people. We have no right to do that till such time as the issue has been put fairly and squarely before the British people. I am satisfied that if it is spelt out in plain and clear language the British people will not be faint-hearted citizens as Opposition Members are. I am sure that the British people will say "If we come out, we shall still survive and once again be Great Britain".

8.21 p.m.

Lord Balniel: I listened to the speech of the Foreign Secretary with a great deal more approval than I read his speech of 1st April. I thought the Foreign Secretary began the negotiations on the wrong foot. There was, I thought, in his original speech, no understanding of the importance of or sympathy with the need of European unity. I thought he was mistaken in that original speech to have threatened to take Britain out of the EEC. Last week's speech was a very major improvement. It is only fair that we should be generous and welcome a sinner who repenteth, because his more recent speech was a major improvement on the original one.
We all know why the Foreign Secretary and the Government have to speak with two voices. It is part of the balancing act which has to go on within the Labour Party. One moment has to be devoted to appeasing the anti-Marketeers and the next moment has to be devoted to trying to preserve and improve that relationship with the greater part of Europe which is fundamental to the well-being of this country. There may be, and from a politician's point of view I accept that there is, strength in this adroitness. It may be adroit, for purely internal party political reasons to shift from one foot to another. It may be for purely party political reasons adroit to harangue and threaten in one speech and a few weeks later to make a speech which is conciliatory, placatory and extremely constructive.
However, I personally do not think it is the right technique in the interests of this country if we are to secure the improvements which many hon. Members and the Government wish to see secured. In a moment of grave difficulty for Europe we do not want ambivalent views from this country or from Europe itself. In these times of economic and political crisis in Europe we should speak with a very clear voice because at the moment Europe is in very bad order indeed.

Mr. Arthur Lewis: And getting worse.

Lord Balniel: It is in a very bad way. It is perplexed and bewildered with problems, and those problems crowd in one upon another to such an extent that it is probably no exaggeration to say that Europe is in a greater state of crisis than it has been at any time since the last war. No one, not even the most rabid anti-Marketeer, can possibly feel any pleasure at the situation at the moment.
What we see is a grouping of democratic industrial nations striving and struggling to meet great economic and social challenges, and our success and our standard of living will depend on the success of those other European countries in meeting those economic and social challenges.
Each of those countries has been struck by and has had to face the energy crisis and the political difficulties of acting in unison. As industrial countries we must meet vastly increased bills for the fuels on which we depend. We must face the fact that these increased bills have given an additional spin to the inflationary spiral in Europe, which is of a nature we have not seen previously in our generation. Each of us in Europe will face rocketing prices for the raw materials on which our industries depend. Each of us faces rocketing prices for food. There are also monetary difficulties.
We have lost two of the great European personalities, with the resignation of Herr Brandt and the death of President Pompidou.
The economy of Italy, one of the founder nations of the Common Market, is heading straight on to the rocks. The hon. Member for Newham, North-West (Mr. Arthur Lewis) may laugh. As a result of the pressures from the Left and from the extreme Right in Italy it is

highly debatable whether the democratic institutions in that country will survive.
In this general picture of the problems of Europe we see the diminution of the strength of NATO. Over and above this we see the threat from this Government to cut our defence expenditure at a time when the Warsaw Pact is growing very steadily in strength.
The balance of power in Europe—as a result of the economic and political disarray and the reluctance of democracies to spend a proper amount in shouldering the defence burden—is shifting away from the Western democracies in favour of the Soviet bloc and the Warsaw Pact. Even with this Government's contribution of added uncertainty a very serious question mark hangs over the future of Europe. The economic threat of uncontrolled inflation is very real. The military threat of an ever-growing mountain of Soviet armaments, far exceeding what the Soviet bloc needs for its own defence, is a very real threat.
I should have thought that sound leadership in these circumstances would have been to provide a degree of certainty and security in Europe. We should build on the achievements of the EEC; we should try to strengthen its cohesion and sense of purpose.
I have no objection to the right hon. Gentleman and the Government negotiating on various aspects of our membership of the EEC, but the underlying threat of withdrawal introduced into these negotiations means that a question mark will exist over the future of Europe for many months to come. If that threat materialised and Britain did withdraw from the Community there would be a political and economic disaster, both for this country and for Western Europe, on a scale which we now find difficult to visualise.
I listened to the hon. Member for Tottenham (Mr. Atkinson). Although he spoke entirely about the interests of the Labour Party—I heard not one word about the interests of our country—there was one point where I did find myself in agreement with him. There has been a major change in the attitude of the Government since the original negotiations on 1st April. It is remarkable how the original grand concept of fundamental renegotiation, about which we heard so much at the election, has dwindled away


into a series of requests for changes within the Treaty of Rome. I give a very warm welcome to this change of heart. Almost all the changes which have been requested by the Government are part of the normal business of the Community. Some of them, like the improvement to the common agricultural policy and the new arrangements for the developing countries, had been started by the last Government.
Nowhere in the last speech on the renegotiating process is there any word about the question of sovereignty, which loomed so large in the original debates. Nowhere in the renegotiating process is there a word about the legislative sovereignty of Parliament. The solution to the question of the legislative sovereignty of Parliament is the scrutiny committee which has been set up by the House. Nowhere is there a fundamental attack on the principles of the common agricultural policy. The new policy is to suggest major improvements consistent with the broad principles on which the policy is based. That is extraordinarily similar to the previous Government's policy of trying to secure improvement within the CAP. Nowhere is there further talk about renegotiating the treaty. We are told that all the proposals put forward by the Government can be solved by negotiation within the treaty.
No one will quarrel with the desire to improve arrangements for the Commonwealth, but, again, many of these were in process before. Discussions about the Protocol 22 countries—the Caribbean, Africa and Asia—have been going on for a long time. The arrangements for New Zealand butter were in any case due for renegotiation this year. Talks on sugar have been going on for a long time and are now reaching a decisive stage. India, for instance, has concluded a treaty with the EEC, and many other Commonwealth countries are negotiating similar treaties with the Community.
The crunch will come in the negotiations about our contributions to and the benefits we receive from the Community Fund. I agree with the hon. Member for Ashfield (Mr. Marquand) in wishing that the Government would place greater emphasis on securing a large regional fund, from which we would benefit. The key lies there.
The fundamental mistake that the Government have made is not that they are trying to alter various aspects of our membership; it is that they are damaging the growth of mutual confidence in Europe when European nations should be coming shoulder to shoulder to meet the economic onslaught which will strike them in the next few years.
It is said that the Government do not really believe in their threat of withdrawal. The threat of withdrawal, which is so disturbing to the rest of Europe, has nothing to do with Britain's interests. It has a great deal to do with the interests of unity within the Labour Party. Having introduced this threat of withdrawal on 1st April, the Government are following a dangerous course, which they will find extremely difficult to control as negotiations proceed. For months—even before the electicn—they denigrated the Common Market. For months they have allowed the initiative to rest in the hands of the anti-Marketeers. They have scorned the achievements of the Common Market, they have threatened withdrawal and, inevitably, this has increased the number of anti-Marketeers and has also raised their hopes.
My condemnation of the Government is that they have elevated party unity above Britain's interests. At a moment of grave peril for Europe they have plunged us and our fellow-European countries into grave uncertainty about the future, which will weaken Europe and us for many months to come.

8.35 p.m.

Mr. Dick Taverne: I shall be as brief as I can. A number of excellent speeches have been made and some of the things I intended to say have already been said better than I could put them by the hon. Members for Ashfield (Mr. Marquand), Inverness (Mr. Johnston) and others.
It is interesting to note that, except for the speech made by the Foreign Secretary, I have not heard from the Government benches any speech which could be said to be the speech of the official Labour Party. On this side of the House speeches tend to be made by those who are in out-and-out opposition to the Common Market or by those who strongly favour continued British membership.
There has been widespread agreement with the approach of the Foreign Secretary in his June statement and with the aims which he seeks to achieve in his negotiations. There is a general feeling that it would be right, proper and consistent—and, indeed, it would enhance the development of the Community in future—if there were a fairer distribution of the financial burdens.
It has been observed by critics and those who have pressed the Foreign Secretary that there has been a shift of emphasis in the Government position. The right hon. Member for Welwyn and Hatfield (Lord Balniel) suggested that the Foreign Secretary spoke with two voices. I do not think that is fair. There has been a shift in emphasis towards staying in the Common Market if possible and negotiation within the existing framework. The hon. Member for Tottenham (Mr. Atkinson) said that this was due entirely to the perfidious and subversive activities of the Foreign Office. I do not know why it is supposed that Ministers suddenly become knaves, fools and weak puppets who can be easily persuaded by the Civil Service. The reality of the situation is probably that there is an increased awareness of and reassessment of the consequences if we pull out of the Common Market.
I have argued in the past that the short-term economic benefits of going into the EEC were rather evenly balanced. In the short term there were some disadvantages which could not be overridden by the certain advantages. It seemed to me that the short-term economic case for entry was somewhat doubtful, but I have no doubt the short-term economic effects of withdrawal would be adverse. If at a certain stage we withdraw from Europe, it would have been much better never to have embarked on the long negotiations, never to have persuaded British industry to look to Europe, never to have caused the redirection of our efforts, and never to have accelerated the decline of our trading relations with the Commonwealth, which was an inevitable consequence of entry into Europe.
I return to the main theme of the criticism advanced by a number of speakers who have referred to the absence in the Foreign Secretary's negotiations of any political commitment to the union of Europe. I believe that the most serious

error made by the Foreign Secretary on 1st April was in a remark he made not in the course of negotiations but in an interview when he expressed the view that the Common Market was essentially a commercial arrangement. He saw it as a customs union and he was not interested in the political developments. This was a flaw which may jeopardise his negotiations. It was not a mistake made by the former Labour Government when they applied for entry.
In a number of speeches made at that time, the present Prime Minister emphasised that the European Community was a political concept and that it was to this that the Labour Party was committed. This was evidenced in the negotiations not only with our future partners but also with those outside the Community, such as the Swedes. If the Foreign Secretary looks back at the discussions which the Prime Minister had with the then Swedish Prime Minister, he will find that time and again the Prime Minister in the then Labour Government emphasised the political commitment involved in the Community It was also a part of the agreement with the Italians signed by the right hon. Member for Fulham (Mr. Stewart), who was then Foreign Secretary. Again it was emphasised that Britain was seeking to establish a political commitment.
Why is this political commitment so fundamental. It is the great divide between those who wish to see the Community flourish and those who are fundamentally opposed to it because they resent a political commitment.
If our contribution is to be less onerous, the benefits to others will also be lessened.
The nation that stands to lose most from a readjustment of the financial arrangements is France. Inevitably there is a clash of interests in these negotiations between Britain and France, and we will need allies in this. The allies that we could expect to have had were the Germans, who also would like to see a rearrangement of the financial commitment, and for political reasons the Dutch and the Belgians. Yet it is precisely our potential allies—the Germans, the Dutch and the Belgians—who were deeply shocked, if not horrified, by the kind of offhand remarks made by the Foreign Secretary on 1st April about his concept of the Community and which from time


to time have been repeated in a somewhat milder form. Those potential allies were already deeply disappointed by the attitude of the previous Government to discussions about a common energy policy.
What is their approach now? Why should they help Britain in these negotiations? Why should they strive to keep Britain inside the Community? They feel that if Britain is kept in, we shall use our influence to frustrate the progress towards that goal which they themselves want. That is the flaw in the negotiations, and it is why I do not share the feeling expressed by the hon. Member for Tottenham (Mr. Atkinson) that the negotiations will probably succeed. I hope that they will. I do not think we can yet say whether they will succeed or fail. But the negotiations are less likely to succeed because we have alienated our potential allies.
I mention lastly the possibility of a referendum. One of the factors which again shocked the other partners in the Community was not the fact of a referendum, which some nations held, but the readiness with which Britain seemed to be willing to accept offering a referendum to break a treaty. It was the attitude that the treaty was not worth anything. It was an attitude which the other nations in Europe expected least of all from Britain. This indifference to a solemnly signed treaty—

Mr. Marten: I do not know whether the hon. and learned Gentleman was here for the Third Reading of the European Communities Bill on 13th July 1972. On that occasion the Labour Opposition's spokesman said that the Labour Party did not consider itself to be bound by the treaties, that it pledged itself at the end of any further negotiations to consult the British people and that the Six must take account of these factors. The Six were aware that this situation would arise.

Mr. Taverne: Of course it is not a simple matter. It is extraordinary, however, that a British Government should now say that we are prepared to break a treaty because in the past we did not agree with a different Government who signed it. That has been the view of many other Governments which we ourselves

denounced—that simply because they do not agree with a treaty which has been signed by their predecessors, they feel entitled to break it. It was that attitude which especially shocked some of our allies.
I hope it will not be supposed that, although there are arguments for a referendum, somehow it is undemocratic to oppose the idea of a referendum on this issue. It was not only the Prime Minister who opposed the idea. It was the policy passed by a two-to-one majority of the Labour Party conference in 1971 that even if the request for an immediate General Election was not met it would still not back a referendum.
A referendum has always been the weapon of those who sought to oppose change. It is also very short-sighted to suppose that what is sauce for the British people will not be sauce for the Scottish people if, later on, the question of Scottish secession arises. If a referendum enables the British people to break a solemn treaty and to leave the Community, why should there not be a referendum whereby the Scottish people may break the Act of Union, if they wish, and thereby control the oil and in this way deprive Britain of the great advantages of all the discoveries on which so many people rely?
I do not believe that democracy consists of government by Gallup Poll or the direct determination by people of very complex issues as opposed to their determination through Parliament. That is true of the European Community treaty, as it is of the Budget and of previous treaties which we have signed. Whenever people have been asked in opinion polls "Do you know enough about the Common Market to decide?" they have always answered "No". It does not seem to me that a referendum is the way in which this matter should be decided. It should be decided by Parliament, as equally important treaties such as that for NATO have been decided.
I hope that the negotiations will achieve for the Foreign Secretary what he is seeking to achieve. It is important, however, for the Foreign Secretary to realise that he has not made it any easier to achieve what he hopes to achieve by refusing to accept the political goal which is what the Community is essentially about.

8.45 p.m.

Mrs. Winifred Ewing: As the hon. and learned Member for Lincoln (Mr. Taverne) said, one can renegotiate more than one treaty. It may be that, within an entirely democratic framework, some day the Treaty of Union will be renegotiated. I do not think that that is too strong meat for this House, which has seen many radical changes. If it were done within a democratic framework it would not be too shocking to the people of Holland or Germany, or of England. But it may be apposite, this matter having been mentioned, that we should learn a little from history.
Although I rarely agreed with Mr. Enoch Powell, I agreed when he said, "England, beware the case of Scotland". Hon. Members may remember that we entered a treaty, a "common market". We were highly experimental in 1707. There was political unity, monetary unity and economic unity. We retained, in theory, only our legal system. Nevertheless hon. Members should look at the disadvantages. The disadvantages are the double rate of unemployment and the fact that 1 million of our best people have emigrated. Those subjects have not been discussed to any great extent by the House and hon. Members should bear that in mind.
Returning to the matter of the treaty which the Government are trying to renegotiate fundamentally, I should like hon. Members who were Members of the House years ago when I was previously a Member to cast their minds back to the debates in which we tried to find the reason why we were to be attracted into this extraordinary arrangement. In those days it was fashionable to talk of the economic link and to play down political unity and monetary unity. They were not to be discussed. It was the economic argument that was dished up, and the main argument was about growth rates. The other countries had a good growth rate or the prospect thereof. If we were to go in with them, we hoped that in some magical way, like Henry VIII taking a new wife and hoping that some of the youth of the new wife would rub off on him, we would achieve similar growth rates. But the growth rate argument was found to be fallacious. We have heard no evidence that that

argument any longer has validity. But it was the argument previously used.
When the growth rate argument was finally crushed, by various sensible speeches from all sides of the House, what emerged from both the Prime Minister at the time when I was previously a Member and the Leader of the Opposition—they are now still the Prime Minister and the Leader of the Opposition, I having missed the turnabout period—was the real motive for taking us into the EEC. That came out in an important debate just before I ceased to be a Member. The real motive was that both right hon. Gentlemen wanted Britain to be great again. The Economist later wrote it up by saying "Stealthily a Super-Power". It was no longer enough to be a great Power. One had to be a super-power, a bloc of some kind, thinking in warlike terms, between the huge millions of America and the huge millions of the Russias. It was a strategic, vainglorious motive. The leader of my party, the hon. Member for Western Isles (Mr. Stewart)—

Mr. Neil Kinnock: Where is he?

Mrs. Ewing: My hon. Friend has been here just as much as many hon. Members who have been called to speak. [Interruption.] Scotland knows, even if this House is so ungallant as not to know. Sometimes the House is less polite than at other times.
My hon. Friend pointed out that the eyes of a fool were on the far ends of the earth. One million of our people have left my country in 50 years. There are slums in my country so bad that anyone who visits some of them becomes very upset. Lord George-Brown visited the Gorbals and said that he did not know it was so bad, but we never heard any more about it from him when he returned to London.
The Government are interested in trade with Holland. Holland does not have slums like the Gorbals and many other places. The Dutch have not lost a million of their best people in 50 years. The problems in Scotland are not being solved. The eyes of my party are very much on the responsibilities all around us, and they will continue to be before


we consider entering into another treaty with no known advantages to us.
We know that the matter is all about politics. It is all coming out now. It is not about a customs union. It will become much more centralised, with much more power of decision in Europe and much more loss of sovereignty to us. It seems to be unfashionable to say anything against it, because those who are in favour of it tend to put it on a pedestal, saying, "We are Europeans". I have always been a European, and I always shall be. Scots law is the same kind of law as they have in Europe. It is different from English law. We always looked to Europe in times gone by for allies, for reasons I shall not mention.
There is nothing noble about the sordid Treaty of Rome, but people sometimes talk about it as if it is noble. What is noble about the way in which the Europeans all acted in the fuel crisis? What is noble about the scramble to get out of the commitment to so-called regional aid? What is noble about Germany's attitude to a new kind of slave worker, to the thousands of migrants from Yugoslavia, Italy and elsewhere, living in dreadful conditions? Is that the great, free movement of labour? I do not find anything noble in that or in France's behaviour over nuclear tests. I do not find very much noble in the state of Italy, in the total lack of conservation of fishing grounds for future generations or in the way in which Italy and other countries shoot every kind of bird, with no thought of their own ecology.
I wish to relate this matter to the peculiar circumstances of Scotland, something that has not been done in the debate so far. The people of Scotland have no voice. They have no say, no seat at the table. When I asked in the House "Who speaks for Scotland?" the former right hon. Member for Dundee, East, Mr. George Thomson, said "I do". That turned out to be a very misleading if not dishonest statement. The right hon. Gentleman did not speak for Scotland. Our fishermen, who have not been mentioned today, were sold down the European river. My predecessor for my constituency, the previous Secretary of State for Scotland, said that I was alarming the

fishermen. The fishermen are already very alarmed. They know that on 1st January 1983 the trawlers from Europe, which are not conservationists, will trawl everything from the sea bottom from the coast of the Moray Firth all the way round the coast of Scotland.
In view of the difficulties of acquiring boats and of the costs, fathers are for the first time in a generation saying to their sons "Don't go into fishing." They are voting with their feet. It may seem amusing to some hon. Members but not to Scotland, where the fishing communities keep whole towns and villages alive. I am speaking up for the fishermen. Not a word has been said about them in the fundamental renegotiations. The inshore fishermen of Scotland are in the majority.
It is suggested that the National Farmers' Union is wholeheartedly behind the common agricultural policy. It has had a change of heart in my part of the world. It was misled. The plight of the dairy, beef and pig farmers in Scotland is such that these patient, long-suffering men are now becoming militant. The Kincardine and Aberdeen branches of the NFU have formed a committee. It has agreed that the lobbying of Members of Parliament is no good. What can it do next?
Farmers are doing this out of sheer desperation. When will there be a return to a sensible agricultural policy? Scotland could be self-sufficient in the production of food. It could be a food-exporting country. Yet we have the absurdity of mountains of butter and beef, and our people look in the butchers' shops and cannot afford to buy meat. How long can this situation be tolerated?
I have a few awkward questions to ask about energy. I believe that the EEC energy policy has been formulated and I believe that it is this. The EEC will keep the right to decide the rate of oil exploitation leaving the land mass to collect the revenues. It will decide the rate of exploitation and the rate of royalty. If that is not taking away all control of oil, what is? Whatever is said about oil in the Scottish sector of the North Sea it is undeniably of interest to this House, whatever happens to Scotland.
We should not allow the EEC to get its greedy hands on the oil. That is precisely what it is trying to do, because I suggest that it is EEC policy. Will the Minister say whether that is admitted? If it is not, will he tell us when there is to be an EEC policy?
I come now to regional aid. The citizens of Scotland know that on their doorstep there is this liquid gold which by 1980 will be worth about £1,000 million. When we conservatively estimated the figure years ago at £800 million, we were ridiculed by the Labour and Conservative Parties and by the Press. We have never had an apology. It now turns out that our sums were right. How can we expect the people of Scotland to put out the begging bowl to try to persuade Germany to give us a few million for the A9, for a few schools and a few houses?
In the oil areas the locals will not be able to get any houses. The American employees and other key workers will get them. How can we explain to the people of Scotland that we need regional aid? The regional aid part of the EEC has been a fraud. We must vote against the Government tonight because we are not satisfied that there has been fundamental renegotiation in the true meaning of the word.
If an election sneaks up before a stage is reached with the negotiations which would make a referendum sensible or desirable, can we have the assurance that a referendum will be held? I do not believe that the people in all parts of Britain do not have enough intelligence to make up their minds. I do not believe that they do not understand this because it is too complicated. They understand it all too well. Could we have a little information about this? Is there to be a referendum if an election comes sooner than we dream of?

Mr. Skinner: 26th September.

Mrs. Ewing: Can we have an assurance that we shall have a referendum with the ballot paper? The people of Scotland are not satisfied with the treaty. They have no representation under it. A total of 22 per cent. of the people of Scotland now vote for my party and we have just started to break through. This House should take careful note of what I have said about the treaty.

9 p.m.

Mr. Nigel Spearing: The speech of the hon. Member for Moray and Nairn (Mrs. Ewing) had the merit of containing some practical examples, and I shall endeavour in the short time available to me to bring more examples to the attention of the House. It is the first time that a Member for the new constituency of Newham, South has addressed the House. The constituency was formerly part of West Ham, South, which was represented by the present Lord Chancellor for 29 years. The House has become accustomed to his characteristic courtesy, wisdom, precision and clarity—qualities which were carefully noted by his constituents. Mr. Bert Oram, the Member for East Ham, South, made a contribution to the House and to world co-operative movements in which he is now working.
My constituency interest in the Common Market is that in the Victorian area of the constituency, which grew up at the time of the great expansion of the port industry in Britain, there is a large sugar refinery, employing 3,000 people. Due to the EEC treaty and the terms which were negotiated at that time it is possible that over a period that refinery will be run down and those people will lose their jobs. I use that example because it shows something of the character of the Community which is perhaps a little less idealistic than the one Conservative Members have sought to portray. It was the failure of the so-called "bankable assurances" to obtain the same amount of Commonwealth sugar that we had been receiving previously which produced the current situation on Thameside and in Liverpool and Greenock. Increased competition between sugar beet and sugar cane has put the whole situation at risk.
Apart from the situation of the refineries in Britain there is the question of the livelihood of the Commonwealth producers—people whom the EEC is supposed to help. Many hon. Members, including, I suspect, the hon. and learned Member for Lincoln (Mr. Taverne) said that the EEC would enable us to help these people more, but the Commonwealth Sugar Agreement, which is now coming to an end, was the ideal link between the developed world and the underdeveloped world. Who can blame Commonwealth producers now for not


sending us as much as they otherwise might? What sort of Community is it that demands that we give up this relationship in order to join?
The Foreign Secretary is engaged in negotiations on this issue. The last Government said that the Australians did not mind our approach over sugar. They have shown, however, that they are willing to send us sugar, perhaps on better terms, and they will be able to act as a buffer if it is possible to vivify the CSA. I ask the Opposition why it is not possible for the EEC, which is supposed to have such a broad and world-wide outlook, to resuscitate the CSA. Not only would that be in the interests of the developing world; it would benefit those whose jobs are at risk in Britain. No amount of regional aid will make up for the loss of work in my constituency, where 25,000 jobs have disappeared in the last few years.
Points made by hon. Members in the debate have been particularly piquant over national sovereignty. It was interesting that the hon. Member for Faversham (Mr. Moate) took up the question of the Luxembourg disagreement. The Foreign Secretary paid some attention to this in his speech and sought to show that it would cover the whole question of national sovereignty. It is not good enough to say that the British people should be dependent for their national sovereignty on an agreement which is in the form of a treaty which the House of Commons has not been able to discuss. Unfortunately, it seems to me that however skilful the Foreign Secretary is he will not be able to get the sort of terms which we shall be able to recommend to our constituents. On that basis we should be compelled to advise them to say "No" to EEC membership.

9.5 p.m.

Mr. Peter Blaker: The House will wish me to congratulate the hon. Member for Newham, South (Mr. Spearing), who has returned to the House and who has made his second maiden speech, if that is the correct way to put it. He addressed a question to me about sugar in answer to which I say that the present problem regarding sugar is the shortage of supply. As my hon. Friend the Member for Saffron Walden

(Mr. Kirk) said, the Commonwealth has been unable to live up to the quota of 1·4 million tons, and this, at the moment, is what is presenting the difficulty. But there are good prospects—perhaps something will be said about this in the concluding speech—of an agreement which will adequately safeguard the interests of the Commonwealth producers.
A number of hon. Members commented on the difference between the speech of the Foreign Secretary in the Council on 1st April and his speech on 4th June. I believe that hon. Members were right to make those comments. I am not now entering into the question whether one speech was rough and the other dulcet, because I want to draw attention to a different point, which I regard as important.
In the earlier speech the right hon. Gentleman gave the impression that he was speaking from outside the Community and that he was sitting in judgment, on the side-lines, on the Community's performance, whereas in his speech on 4th June, on the contrary, he made clear that he proposes to work for the changes he wants as a full member of the Community, accepting that the Community method is to work together to see if common solutions can be found to common problems. The distinction of which I speak may seem minor to some hon. Members, but I believe it is fundamental. In some types of negotiation it may be a sensible tactic to play hard to get—to threaten that if one does not get one's way one will leave the negotiating table—but what we are involved in here is not that sort of negotiation. I believe that the truth is almost the opposite—that the Government will have the best chance of securing agreement to their proposals if they make as clear as they can their intention to stay in the Community.
I have no doubt that our partners in the Community would greatly prefer that we should stay in but, like the rest of the world, they have immense problems-problems of commodity prices, the quadrupling of oil prices, balance of payment deficits and rates of inflation unprecedented in most countries during this century. I believe that in this situation our partners will feel that what is most required from the members of the Community is a determined attack on these gigantic problems by a united Community.
Important though many of the questions are that the Foreign Secretary has raised, I suspect that if our colleagues are forced to make a choice they may well decide that they prefer an effective Community without us to a hamstrung one with Britain as a doubting partner.
The conclusion I draw therefore is that our negotiating hand will be strengthened the more we can persuade our partners that we intend to play our part in the Community, in a community spirit. I welcome the stress which the right hon. Gentleman places—I hope he will continue to place it—on the fact that Britain will co-operate fully in the Community's current work.
The right hon. Gentleman referred to value added tax. He said that it was already being dealt with in different negotiations and that that was the reason he had not covered it in his speech on 4th June. In saying that, he has put his finger directly on the nature of the Community process. As my hon. Friend the Member for Saffron Walden has pointed out, the Community process is one of continuous negotiation—the evolution of an organic association which is constantly developing.
My hon. Friend mentioned a number of problems which required resolution, including workers' rights, the Parliament, and many others. The life of the Community is a continuous process of negotiation. I would compare it to a continuous piece of cloth which is coming off the loom and into which the members can weave what patterns they choose, and different patterns from time to time. The right hon. Gentleman is cutting up this piece of cloth, saying "It starts here and ends there, and I will call this renegotiation." He now says that this piece of cloth does not include the question of VAT but that it does include the common agricultural policy, trade and aid. and regional and industrial problems.
Why does he include the last three areas but exclude VAT from what he calls renegotiation? Those three matters have been the subject of negotiation for many years. Even the question of our contribution to the budget has already been brought up in the Parliament. It has been the position ever since our entry that it could be taken up at any time, relying on the undertaking in paragraph 96 of our White Paper.
The decision to exclude VAT but not the other three items—setting on one side the question of our budget contribution— illustrates another point. The Foreign Secretary said that the return of a Conservative Government would wreck the process of renegotiation. This betrays a fundamental misunderstanding of what renegotiation, or negotiation, is all about. We have been negotiating on most of the topics that the right hon. Gentleman has described for a long time. He does not seem to have noticed. Is he not aware that when a Conservative Government return negotiation will continue on all these matters and on others'?
The Foreign Secretary claimed that the terms of entry were inequitable from the start. My right hon. and learned Friend the Member for Hexham (Mr. Rippon) dealt with that claim. I am rather surprised at the claim, in view of what the right hon. Member for Fulham (Mr. Stewart) and Mr. George Thomson said about the terms of entry after they were agreed. They made it clear that they would have regarded them as acceptable.
My surprise increased when I looked up what the Labour White Paper of 1970 said about the Agricultural Fund, then, as now, by far the biggest item in the budget:
In the negotiations, it will be necessary not only to settle our starting contribution to the fund but also to settle the transitional arrangements under which we approach paying our full share of the recently agreed financing arrangements, which will be changing from year to year.
So the Labour Party made it clear at that time that the entry negotiations would be concerned with finding a suitable method of enabling us to adapt to the Community system rather than with altering that system. As we were late entrants to the club, that was a realistic point of view. However, it does not prevent us from suggesting changes now that we are members.
My right hon. and learned Friend also referred to the uncertainty about estimating the budgetary burden that we would face. He referred to the difficulty of judging the extent to which we would benefit from the dynamic effect of joining a Common Market of 300 million people. The right hon. Member for Jarrow (Mr. Fernyhough) referred to that matter in an intervention. The House might like


to have its attention drawn to a Written Answer which I received yesterday from the Paymaster-General. It says that in 1973 our rate of growth of gross domestic product was 5·6 per cent. That is only just below the arithmetical average of the Community for that year. In the preceding year, before we were a member of the Community, our growth rate was 3·1 per cent. That was 1·15 per cent. below the arithmetical average for the Community. Relative to the Community average, we made an improvement of 1 per cent. in the first year of our entry. I realise that that is not conclusive—

Mr. Michael English: Has the hon. Gentleman read the report of the National Institute of Economic and Social Research, published yesterday, which indicates that an investigation of figures similar to that to which he has referred relating to industries which have had reduced tariffs has shown that there is no connection between those figures and our joining the Common Market? That is not to say that there might not be a connection, but the institute claims that such a connection cannot be proved at the moment.

Mr. Blaker: I am not saying that the figures which I have quoted prove my point, but they are consistent with the proposition. I do not think that the institute would contradict that.

Mr. Fernyhough: Mr. Fernyhough rose—

Mr. Blaker: No, I shall not give way. I have already surrendered five minutes.
There seems to be little difference between the two major parties on the common agricultural policy, trade, aid and regional and industrial policy. There are, as my right hon. Friend the Member for Knutsford (Mr. Davies) remarked in relation to the common agricultural policy, one or two matters on which the Conservative Party might not agree, but my right hon. Friend the Member for Grantham (Mr. Godber), as the House will recall, put forward some far-reaching proposals in the Council which were directed to the same sort of reforms as have been called for by the Government.
Our objectives are similar regarding trade with the developing countries. The

Foreign Secretary has called for an improvement in the Generalised Scheme of Preferences which was introduced in 1973. Its coverage was extended in 1974 by 40 per cent. That is a continuing process of improvement and we can expect to see the results of this year's review fairly soon.
The total flow of official aid and resources from the Community to the less-developed countries in 1973 was nearly 5 billion dollars. The comparable figure for the United States was just over 3 billion dollars.
It was always foreseen that the Community's aid to regional development would be supplementary to national aid and would not replace it. It is much to our advantage that Community aid should be developed if the Government take the view that we shall be one of the poorer members of the Community. I hope they will make an increasing effort to make progress on the regional development fund. I also attach importance to the point made by my right hon. Friend the Member for Knutsford about the controls on regional aid being relevant to a country which expects to be poorer than its partners. If that were not so there would be a danger that we would be outbid by the richer members.
I have a number of questions to put to the Minister who is to reply. My first question concerns the consultations which the Government have had. I imagine that on a question of this importance—the major issue of whether we should remain in the Community— the Government will have had consultations with a very large number of people and organisations and foreign countries. I hope that the Minister will tell the House more than it has yet been told about what consultations have taken place. We know that the CBI strongly favours membership. What can the hon. Gentleman tell us about the consultations with that body? Has he consulted the Association of Chambers of Commerce? Mr. Peter Stedeford, President of the Birmingham Chamber of Commerce, said recently that it would be disastrous economically to contemplate withdrawal. What consultations have the Government had with the Smaller Businesses Associations, the TUC, the NFU and other associations and firms?
What foreign and Commonwealth countries have the Government consulted? We read in the Press that the Americans have told the Foreign Secretary and the Minister of Agriculture that they regard it as important that we should stay in the Community. Will the hon. Gentleman confirm that that is true?
What about the Commonwealth? In reply to me at Question Time yesterday, the Secretary of State for Trade gave the impression that the Government had not consulted Commonwealth countries about whether they would prefer us to stay in. I infer from what the Foreign Secretary said today that there has been consultations, and I am glad that that is so. Is it not a fact that most Commonwealth countries would prefer to deal with the enlarged Community with us still inside it?
What about the EFTA countries? Have we consulted them? Finally, has any of the countries with which the Government have had consultations said that it would prefer us to leave the Community?
The House is entitled also to hear from the Government what assessment they have made of the consequences of leaving the Community. I hope that the hon. Gentleman will have something to tell us about that. Meanwhile I will venture my own assessment. It will be pessimistic, but I hope that the hon. Gentleman will not suggest that by making it I am undermining the Government's negotiating position, because, as I have said, that position will be the stronger the more determined they show themselves to stay in.
I believe that if we were to withdraw, the Community would stay together. I believe that Denmark and Ireland would remain members and that the eight Community countries would put up tariffs against us.

Mr. Marten: Why?

Mr. Blaker: That is my assessment. If the Minister of State disagrees with it I hope he will say so, because I want to draw him out. If those countries were to put up tariffs against us we would suffer great damage in what is our largest market, which takes nearly one-third of our exports. I believe that there would be no question of the Community making

free trade area arrangements with us as it did with Norway. If I am asked why, I would simply say that we are not Norway. We are much bigger and more important than Norway, even on the pessimistic forecasts that the Government are making, and France and possibly the other Community countries would feel that if we were granted free trade area status that would be to set a precedent which others might want to follow.

Mr. John Davies: I make a simple inquiry. Is my hon. Friend aware, as I am sure he is, that one of the reasons why Norway had such very good arrangements with the Community was that it had a very good advocate in the heart of the Community—namely, Britain? The problem that I think my hon. Friend is facing is that Britain would be outside the Community with no advocate within it.

Mr. Blaker: I am obliged to my right hon. Friend. The only reason for my reluctance to give way was shortage of time.
I believe that the Commonwealth countries would not agree to restore preferences in our favour if it meant, as it might, loss of preferences for them in the Community. The Commonwealth would sell raw materials and food to us only at world prices, and if world prices again went higher than CAP prices we would not have the benefit of the latter. I believe that our industry and our balance of trade would suffer, that the balance of payments, which is expected to be in deficit by several thousands of millions of pounds a year, would take a similar blow, that in international negotiations such as the forthcoming ones in GATT the decisions would be made by the Americans, the Japanese and the Community and that we should have to accept what was decided, however unfavourable to ourselves. All this would be happening in a world whose economy is more uncertain than it has been at any time since the war and in which one would expect nations with economic problems to want to stick together with their friends rather than turn them away.
If we remain in the Community the Government expect that our percentage of the total Community GNP will by 1980 be only 14 per cent. What do


they expect it would be if we were outside?
I believe that in the present economic circumstances to leave the Community would be an act of folly comparable to jumping off a ship in mid-Atlantic without a life belt. Perhaps some hon. Members differ from my assessment of the consequences, but perhaps the Minister of State will say whether he disagrees with me and in what respect.
I believe that the political and strategic consequences, which have been referred to by a number of my hon. Friends, would be even more serious. A noble Lord is reported to have said the other day that he was opposed to membership of the Community because he wanted his grandchildren to be free men. With respect to the noble Lord, I believe that he is looking in the wrong direction. Any threat to his grandchildren's freedom will not come from Brussels or from any closer co-operation which may develop, as I hope it will develop, between an association of free nations none of which can be obliged to pool more of its sovereignty than it wishes. [HON. MEMBERS: "Oh!"] It cannot. The noble Lord should be looking not at Brussels but at Moscow, for it is from there that the threat to his grandchildren's freedom still comes. I am not suggesting that the Russians are planning a military assault on the West, but I am suggesting that in spite of the fashionable talk of detente they are still bent on expanding their power wherever they can, preferably by peaceful means.
The House does not have to take my word for this, because there is somebody who can speak on this matter with much more authority than I—Alexander Solzhenitsyn. This is what he says—I should like the House to listen to this— in his "Letter to Soviet Leaders" written last autumn, in the opening paragraph which he heads "The West on its knees":
Neither after the Crimean War nor, more recently, after the war with Japan, nor in 1916, 1931 or 1941, would even the most unbridled patriotic soothsayer have dared to set forth so arrogant a prospect: that the time was approaching, indeed, was close at hand, when all the great European powers taken together would cease to exist as a serious physical force; that their rulers would resort to all manner of concessions simply to win the favour

of the rulers of the future Russia, would even vie with one another to gain that favour, just so long as the Russian press would stop abusing them; and that they would grow so weak, without losing a single war.
That is how the West looks to Solzhenitsyn. I ask the House whether we should be content with that prospect. Solzhenitsyn does not take the view that the Soviet Union has abandoned what he calls its world expansionary role. His whole letter is a passionate plea to the Soviet leaders that they should now abandon it and turn their strength to the improvement of their own country.
The most serious consequences of a British withdrawal from the Community would not be simply the damage done to jobs, earnings and living standards in our country, although that would be serious enough. The most serious consequences would be to risk the political future of Western Europe.
The Foreign Secretary said in his speech on 4th June that he had a feeling that there existed among Community members a diminished unity of purpose, a growing divergence in our economies and readiness to seek nationalist solutions to problems that demanded common and joint action. I do not quarrel with that analysis, but if it is correct it makes the consequences of any British withdrawal even more serious. They could involve a massive blow to the self-confidence of Western Europe and what could be the first steps towards a crumbling of its political will to survive.
The Government have undertaken a renegotiation, whatever that may mean. Whether it is timely or untimely, meaningful or meaningless, they cannot now escape going through with it. I hope they will approach the negotiations in a reasonable spirit and with a determination to stay in the Community, because in that way they will have the best chance of succeeding in their negotiations and of ensuring that what the noble Lord and this House want will be achieved—that our children and grandchildren will be free men.

9.32 p.m.

The Minister of State for Foreign and Commonwealth Affairs (Mr. Roy Hattersley): The hon. and learned Member for Lincoln (Mr. Taverne) began his speech by saying that virtually and perhaps all Members of the House had made


speeches this afternoon and evening which offered virtually no support to Government policy. If he thinks about it he will agree that one of the extraordinary features of the debate today has been the degree of unanimity we have heard for not simply the concept of improving the terms on which we entered the Community but, indeed, the proposals for improvement which are contained in the Labour Party manifesto, which were explained to the Council of Ministers by the Foreign Secretary on 1st April and 4th June, and which he has rehearsed again today as part of our continuing strategy for the renegotiation of our terms of entry. The support has had a variation of nuance. There have been different expressions of hope as to whether the eventual renegotion succeeds or fails. Various hon. Members hoped that we would push ahead with renegotiation in one area or another at various speeds and with various intensities.
From a variety of points of view there has been virtually no one who thought that the Government were wrong to make the criticisms they have made of the Community and its institutions, or were wrong to try to improve those institutions and the way the Community works.
There are a variety of nuances as to how one approaches the almost universally agreed proposals. My belief remains that the best interests of this country would be served were it possible for us to remain members of the EEC. I have never tried to hide or to deny that conviction. I do not intend to do that this evening.
That conviction in no way leads me to believe that the renegotiation on which the Government have embarked is inappropriate, wrong or unnecessary, or, indeed, that the Government should deviate from the policy which they offered the British people in most precise terms at the General Election.
We are all grateful for the discovery that no one in the House has suggested that what was proposed in the Labour Party election manifesto, or repeated in Luxembourg on 1st April, should be abandoned or in any way modified.

Mrs. Winifred Ewing: No—

Mr. Hattersley: The hon. Lady must listen. She has suggested that they should

be extended. If she wishes to tell me that those proposals go too far, I shall sit down while she does so.

Mrs. Ewing: My suggestion was that they do not go nearly far enough from the Scottish point of view; they cannot be taken too seriously by people with my point of view.

Mr. Hattersley: I am glad that the hon. Lady confirms my judgment. That is exactly what I said a moment ago. She and her hon. Friends will no doubt register their disapproval in the Lobby, but they will be in a small minority, because other right hon. and hon. Members have been almost embarrassing in their support and enthusiasm.
The hon. Member for Saffron Walden (Mr. Kirk) said that this process was all going on before. The right hon. and learned Member for Hexham (Mr. Rippon) talked of renegotiation as a continuous process and said that we were nearer than ever before to a bipartisan policy on Europe. If that is true, I wish that one or both of them would tell the Leader of the Opposition. If The Times newspaper is to be believed—and which of us has the temerity to suggest that anything it publishes is inaccurate?—on 6th June, less than a week ago, the Leader of the Opposition was speaking about renegotiation endangering the lives of other Community members by the uncertainties that the process involved. That is very different from what the right hon. and learned Member for Hexham and some of his hon. Friends were saying earlier today.
Of course, the Leader of the Opposition was wrong. If a successful renegotiation ends with our continued membership of the EEC it will leave the Community a great deal stronger than it was at the beginning of that process. For one thing, several improvements will have been made in the Community's life and institutions which will be of benefit to all its members.
Secondly, as the party policy which I represent will be applied, Britain as a continuing member will by definition be a Britain which is a member with the genuine demonstrated consent of the British people. The Community cannot thrive if some or all of its constituent member States are in the Community


without the support or enthusiasm of the people of those States.
While the Leader of the Opposition is wrong in suggesting that our proposals are likely to damage the prospects of the Community should they turn out well, hon. Gentlemen opposite who have suggested that the fundamental renegotiation which is represented by our policy would have gone on had the Leader of the Opposition still occupied the Government benches are equally, or perhaps even more, wrong.
I give a simple example. Is it suggested that with a different degree of determination, with a different exercise that was not published, promised and embodied in an election manifesto, as our promises were embodied, what we propose for reorganising the budget and the budgetary contributions would have been achieved by the Opposition? Our case for reorganising the budget and the budgetary contribution is based upon the principle that it is in the interests of all members of the Community to have a budgetary contribution which makes allowances for those States whose gross domestic product is basically and Fundamentally out of line with the average in the Community. The example we take to justify that contention is Great Britain, and the prospect that by 1980 Great Britain's gross domestic product will be well below the average.
The right hon. Member for Chipping Barnet (Mr. Maudling) complained that we made that fact public and that it did our case no good to explain the statistical fact that we are moving down the gross domestic product table. If we were unable to reveal our position, I do not know how we would be able to renegotiate our budgetary contribution.

Mr. Rippon: I hope the hon. Gentleman will say that he is talking about our position on his assumptions. They are not assumptions which we would accept as representing the prosperity which would result from a Conservative Government.

Mr. Hattersley: I know that that is so, because when the Leader of the Opposition was Prime Minister he thought it right publicly to rebuke a senior public servant for making the facts public.

although he is now clear that the facts which Lord Rothschild thought it right to publish in a speech a few months ago are correct. The right hon. and learned Gentleman has demonstrated that as the Conservatives would be unable to face the reality of the British position in the Community they would have been reluctant to embark upon the fundamental renegotiation which characterises the work of the Labour Party. Everything the right hon. and learned Gentleman does and says demonstrates this fact. He believes that his negotiations were a success and inevitably is disinclined to believe that there can be improvements. We believe that improvements can be made and that renegotiation can be brought to a successful conclusion.
The right hon. Member for Knutsford (Mr. Davies) said in his speech, as he yesterday had the courtesy to tell me he would, that the Community faces many problems as well as those flowing from British renegotiation. None of us denies that to be the case. In the last four months my right hon. Friend the Foreign Secretary and others have tried to play their part as full participating members in the Community in solving those problems.
The hon. Member for Saffron Walden asked about performance in the various Councils of Ministers and asked why occasionally we allowed business to go ahead and on other occasions placed a reserve on Community business. My right hon. Friend the Prime Minister has made it clear that we shall take part in on-going business as full members of the Community so long as that business does not prejudice our eventual renegotiation objectives. That is the point of our policy. Occasionally we, and other countries in their turn, place a reserve on matters passing through the various councils. We did so at yesterday's meeting. However, that is not an indication of our renegotiating position. If our negotiations prove successful and we remain permanent members, we shall from time to time, just like any other Community member, place a reserve on various items. Of the four ministerial meetings I have attended our record of placing reserves on business is not as extensive as some countries have deployed, but is more extensive than others. That is the real


interpretation of our behaviour in the Council of Ministers.

Mr. Kirk: What part in the renegotiation was prejudiced by the redundancy provisions which a Labour Minister sought to block yesterday?

Mr. Hattersley: That is the second part of the answer. Any member may seek to place a reserve on an item if that member wishes to consider it further. This will be the case if our renegotiations are successful. What happens is that a member Government says, "We are not ready to take a decision. This does not imply that we do not like the Community but that we require time to think about the matter at hand." It is an eminently reasonable position to take up.
My right hon. Friend has been quite specific about our future performance in the Community. He said last week:
If the negotiations are successful and they secure the approval of the British people, we shall be ready to play our full part in constructing a new Europe.
That is our policy. My right hon. Friend went on to say:
Before we reach that point we have a long way to go.
I want to reiterate this evening that at every stage as we go along we shall be guided by our established policy. This is to be a genuine renegotiation. This renegotiation is to be carried out in good faith and will be conducted with every hope of success. The Government will make known to the British people their verdict on the eventual outcome of renegotiation. Finally, and most important of all, at the end of the process the British people themselves must decide where they believe their future destiny lies.
In this debate doubts have been expressed about aspects of the renegotiation policy. It is true to say that the issue of sovereignty, which concerns people as well as Parliaments, has been the main area of concern on the Labour benches. Although my right hon. Friends are anxious to determine the matter, sooner or later it is the British people who will decide. I say again—and I may say this a third or a fourth time before my speech is finished—that that is our established policy, and a policy on which the people must and will be assured.
But the sovereignty issue is an issue about which I admit the European Community poses special problems and creates special difficulties. It does so because in one way the Community poses difficulties which are different from all the others involved in the membership of international organisations. It is its ability and its power to create legislation which governs and binds Great Britain. That is a fact which if it is encompassed properly, means that it works in a complementary way to the decisions of this House but which if it is not encompassed properly means that it works in competition with the decisions of this House. I believe that the Foster Report—

Mr. Dafydd Wigley: If there is a referendum on this issue in due course, will the Government take care to publish the results in such a way that they show the views of Wales and Scotland separate from those of England so that there is no misunderstanding about the attitude of the people of Wales and Scotland?

Mr. Hattersley: I do not intend to go through the details of a hypothetical referendum held at the end of renegotiations the outcome of which we do not yet know. It is possible that in February or March we may discover that our majority in a General Election has increased to 30 or 40, and we may wish to increase it to 50 or 100 by having another General Election on this issue.

Mr. Jeffrey Archer: The Labour Party may lose by 40 or 50.

Sir John Rodgers: Sir John Rodgers rose—

Mr. Hattersley: No, I shall not give way.
I was saying that I believe that the creation of the Foster Committee's scrutiny committee goes a very long way to ensuring that the proper sovereignty which this House needs and must preserve can remain intact. It does so for two or three distinct reasons. First, it offers the opportunity to a very distinguished committee of this House to examine at an early date proposals as they come out of the European Commission. They are proposals which come to it before they have gone to the essential, supreme body of the European Community. The essential decision-making body of the Community is the Council of


Ministers, which in effect is the real repository of power within the Community. It is there that the real decisions are made. Before they are taken, it remains eminently possible, thanks to the scrutiny committee, for this House to express its views upon them.
My right hon. Friend the Member for Battersea, North (Mr. Jay) referred to what he described as a directive from the Community — Community document R1253/74 (FIN/306). He said that that substantial document was likely to pass into Community law without this House having prior opportunity to discuss it. With respect to my right hon. Friend, he chose a remarkably bad example. That document has gone to the scrutiny committee, which has announced that it should not be allowed to proceed within the Council of Ministers until this House has debated it. A few days ago my right hon. Friend the Chancellor of the Exchequer told his colleagues in the Finance Council that he could not allow discussion of that document to proceed until this House had had an opportunity to discuss it.

Mr. Jay: I know all that very well, but will my hon. Friend now give an assurance that in no case will the Government allow any legislative instrument to proceed further in the EEC if the scrutiny committee has notified my right hon. and hon. Friends that it thinks that it should be examined by this House?

Mr. Hattersley: Certainly. In the case of legislative instruments, any other arrangement would be intolerable. My right hon. Friend will also appreciate that some of his right hon. Friends—notably the Minister of Agriculture—spend almost one day a week carrying out negotiations in Brussels, not necessarily on legislation but on other matters. I am sure that no reasonable Member of this House would wish to prevent my right hon. Friend carrying on discussions in the national interest while the detail of such instruments was being considered by the scrutiny committee. Concerning the legislation, however, I give my right hon. Friend that assurance, willingly and without qualification.
However, there is another aspect to sovereignty which the House ought to consider. In some ways, perhaps it is

a more important aspect than the mechanism created in the House for examining secondary legislation through the scrutiny committee. My right hon. Friend the Foreign Secretary said little—perhaps virtually nothing—about the theory of sovereignty in his two speeches to the Council of Ministers, on 1st April and 4th June. But everything that he said was concerned about the practice of sovereignty. I hope that we can discuss our prospects in Europe more in terms of the reality of British membership than the rhetoric of British membership.
I give an example of what I mean by the reality of sovereignty, an example which my right hon. Friend the Foreign Secretary took in a speech he made on Saturday, in which he said:
We need to be assured that no inhibitions will be placed on the operation of the regional policy that Britain might think right for British development areas.
I believe we will receive that assurance, but when we do, the assurance we receive will not be simply about regional policy; it will be an assurance about sovereignty.

Dr. Keith Hampson: Will the Minister say what is "fundamental" and "renegotiating" about the reference in his right hon. Friend's speech to the Community working party which already exists on regional aids? Is not this a guarantee, and is not "renegotiation" simply a euphemism for what he says is an assurance that his fears can be set at rest?

Mr. Hattersley: If the hon. Gentleman had been a Member of the House before February he would have discovered that no such assurances or determination were displayed by the right hon. Gentlemen who then occupied the Government Front Bench, who told us constantly, and indeed during the General Election, that these things could not be done.

Mr. Rippon: On the contrary, surely the hon. Gentleman knows that assurances were given throughout the discussions that took place on the European Communities Act and the treaties. We believe that we have those assurances from the Community, and it weakens our case to suggest that they were not firm commitments.

Mr. Hattersley: Then let me take another example. [Interruption.] There is no profit in assertion and denial. We shall


make no progress there. Let us take, therefore, the example of the CAP. In our renegotiation in that area we say, first, that we must preserve the right of access to traditional markets and that we want a Community regime which makes sure that, irrespective of the movements in terms of world trade and costs of alternative producers, we shall be enabled to make differential pricing arrangements, with some prospects of allowing those commodities into the Community. We say that the Community regime ought to concentrate more on encouraging the efficient and less on preserving the inefficient. The right hon. and learned Gentleman nods assent to that as if he had always advocated and stood for that policy, but it was not until the sort of renegotiation which my right hon. Friend has begun took off with the force, vigour and determination that he showed, that it began to materialise.
I turn to two other points. The first concerns the food price argument, on which I have already touched, and concerns very much the point made by my right hon. Friend the Member for Batter-sea, North in what I would describe as a most powerful speech. My right hon. Friend asked us not to negotiate on the assumption that food prices in the Community, which certainly over the last few years have been appreciably below world levels, would continue at those levels indefinitely.
I say three things about that. First, it is very clear to all of us that the concept of very cheap food from the old Commonwealth and the new Commonwealth is no longer a reality. But the prospect that sometimes the prices of Commonwealth foods may be marginally below Community levels is a possibility. What we struggle to ensure is a regime of agricultural pricing in the Community that makes sure that when the movement is in the direction which my right hon. Friend prophesies, the Community and its members can take advantage of this. That seems to me to be in the interests of the Community and of the Commonwealth, which is supplying those foods.
The other point which we have been most conscious of during the renegotiation is our absolute obligation to ensure that the Commonwealth interests, whether or not its food is cheap, are adequately preserved. I concede the point made by

one hon. Member that a good deal of resentment is felt in some parts of the Commonwealth about the concept of cheap food, because they do not regard it as their role and function in the modern world to provide cheap food.
Sometimes we shall preserve the Commonwealth interests by insisting on the importation of expensive food into the Community. I take the sugar example given by my hon. Friend the Member for Newham, South (Mr. Spearing), who I refuse to believe has just made a maiden speech, as he is not only an hon. Friend but an old friend. Our determination to preserve the interests of the Caribbean in particular is a determination to bring into the Community food which is produced rather more expensively than the food produced within the Community. That nevertheless remains our obligation, because we believe that the renegotiation is fundamentally concerned with preserving interests outside the Community where it is our responsibility and inside Great Britain where those interests are properly our concern.
Two of those interests were raised by the hon. Member for Moray and Nairn (Mrs. Ewing). The first was fishing. The Treaty of Accession allowed a derogation with regard to fishing policy within the Community. We are not committed to the Community's fishing policy, which is why my right hon. Friend hardly referred to it.

Mrs. Winifred Ewing: Can the Government change it?

Mr. Hattersley: Yes. We are about to take part in the Law of the Sea conference at Caracas. It is there that the fundamental decisions about fishing policy will be taken. [Interruption.] If the hon. Lady wants to continue her strident complaints, she must understand that her stridency is not appropriate in a debate on the EEC.
The hon. Lady's second point concerned energy policies. I hope she knows that the Community energy policy is no more than a string of aspirations and platitudes. I suspect she knows that the United Kingdom's energy policy is very different. What she does not seem to know is that neither of those policies remotely resembles the description she gave.

Mrs. Ewing: Mrs. Ewing rose—

Mr. Deputy Speaker (Mr. Oscar Murton): Order. If the Minister does not wish to give way, he must not be pressed.

Mrs. Ewing: On a point of order, Mr. Deputy Speaker. What is the point of a Minister writing down serious questions on behalf of large populations when he gives no answer?

Mr. Deputy Speaker: That is not a matter for the Chair.

Mr. Hattersley: There are many points about our prospects in the Community which it is impossible for us to predict. It is impossible to predict whether or not we could enter into another arrangement with other countries in Europe if we left the Community. While my right hon. Friend the Member for Battersea, North is wrong to say that it is rash to insist that we could not, it is equally wrong for him to insist that we could. That remains a matter for doubt, speculation and uncertainty.
But one thing about the entire issue is demonstrable. My right hon. and learned Friend the Member for Liverpool, Edge Hill (Sir A. Irvine) talked about the lack of faith in politicians and about the erosion of democracy because poli-

ticians do not keep their promises. With him, I believe that if the Labour Party were to go back on the concept of fundamental renegotiation, followed by a genuine test of the opinions of the British people, which will in all probability take the form of a referendum, we should not only be damaging our party but damaging the concept of democracy in this country.
For that reason if for no other—and there are many other reasons of great strength—we again confirm tonight our serious, genuine policy of renegotiation in the terms so clearly specified in the Labour Party manifesto. At the end of that process, whether it has turned out to be terms on which we can stay in or terms on which we must come out, we confirm, we promise again, we reassert that the final judgment must be given to the British people. It is their destiny we are deciding. It is not possible to say that only the House of Commons is clever and brave or determined enough to make such complicated judgments.
One hundred and fifty years ago somebody talked in the House about trusting the people. That is what we have to do over the EEC.

It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

LIVESTOCK (WELFARE)

10 p.m.

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Roland Moyle): I beg to move,
That the Welfare of Livestock (Cattle and Poultry) Regulations 1974, a draft of which was laid before this House on 14th May, be approved.
I think it would be convenient if we— [Interruption.]—also discussed the Welfare of Livestock (Docking of Pigs) Regulations 1974.

Mr. Deputy Speaker: Order. Will hon. Members who do not wish to listen to the Minister withdraw quietly so that the debate may continue.

Mrs. Winifred Ewing (Moray and Nairn): On a point of order, Mr. Deputy Speaker. Are you aware that the clock above your Chair is not accurate and that the Government have stooped so low as to rely on an inaccurate clock, in keeping with their—

Mr. Deputy Speaker: Order. The clock by which the Chair works is perfectly accurate. The last debate ended at ten o'clock, according to the Standing Order. The other matter which the hon. Lady raises is not a point of order.

Mrs. Ewing: Further to that point of order, Mr. Deputy Speaker. We were studying the clock most carefully.

Mr. Deputy Speaker: Order. That is not a point of order.

Mrs. Ewing: The Government have prevented a vote because they are afraid of a vote on the question of the Common Market.

Mr. Dafydd Wigley: Is this the way the House behaves? It is a disgrace.

Mr. Deputy Speaker: Order. That is not the way to address the Chair.

The Parliamentary Secretary to the Treasury (Mr. Robert Mellish): Further to that point of order, Mr. Deputy Speaker. Is it not a fact that if the so-called Opposition in this House had

wanted to have a vote all they had to do, a moment before ten o'clock—and I gather that they were looking at the clock —was to move "That the Question be now put"? The fact that they have not got enough sense or intelligence to know the rules of this House is no reason why they should criticise those who do.

Mr. Deputy Speaker: The earlier part of the observations made by the right hon. Gentleman is correct. I will not comment on the second part.

Mrs. Ewing: Further to that point of order, Mr. Deputy Speaker. While I accept everything that you have said, may I point out that intimation was given of a vote. There is no doubt that the Government were afraid to have a vote.

Mr. Deputy Speaker: That is not a point of order.

Mr. Moyle: In case it has escaped the attention of the House may I point out that I am moving,
That the Welfare of Livestock (Cattle and Poultry) Regulations 1974, a draft of which was laid before this House on 14th May, be approved.
I have also suggested that we discuss at the same time the regulations relating to the docking of pigs. The two sets of draft regulations were laid under powers provided in Part I of the Agriculture (Miscellaneous Provisions) Act 1968 under which it is an offence to allow livestock on agricultural land to suffer unnecessary pain or unnecessary distress. That Act was passed when we were last in Government and it was the result of the report of the Brambell Committee in 1965. Parliament has already approved four codes of conduct for the welfare of cattle, pigs, poultry and turkeys, and these already give fairly authoritative guidance to producers who for the most part are only too anxious to secure the well-being of the animals—

Mr. F. A. Burden: On a point of order, Mr. Deputy Speaker. Will you please appeal to the hon. Member for Moray and Nairn (Mrs. Ewing) and her hon. Friends and others who are engaged in discussion about the previous debate to restrain themselves? Many of us wish to hear what the Minister is saying.

Mr. Deputy Speaker: It would be convenient for the House if hon. Members could hear the Minister.

Mr. Moyle: These matters are of considerable interest to large sections of our population.
As I was saying, these producers are for the most part only too anxious to secure the well-being of the birds and animals in their care. Those codes were brought before the House when my party was last in office, I believe by my right hon. and learned Friend the Member for Anglesey (Mr. Hughes), and we always envisaged that the codes would be followed up by regulations. The regulations we are considering tonight are the first of their kind and they will lead to a further stage in the development of a comprehensive policy for animal welfare. We intend from time to time to produce further sets of regulations as appropriate.
In drawing up the proposals for welfare regulations we can rely on the advice of the Farm Animal Welfare Advisory Committee. It has advised on the draft regulations we are considering tonight, and I take this opportunity to thank the members of the Committee for the conscientious way in which they have applied themselves to their duties and also to give our good wishes to the newly-appointed chairman, Professor Harrison, who has taken over the important assignment of chairing the committee.
The 1968 Act requires that the Minister of Agriculture and the Secretary of State for Scotland should consult all the interests affected by the proposals, and the Ministers have done that. The comments received as a result were referred to the advisory committee and modifications of the proposals have resulted from this process of consultation. We now consider that the orders represent a useful step forward for the House to take.
Perhaps I may say a little about the policy on mutilations. The Department has three principles which it adopts towards these problems. First, the Minister of Agriculture does not like mutilations, in principle, but we realise that some are inescapably necessary and that some are necessary because they may avoid the cause of greater suffering than if they were not carried out. Finally, we consider that in general welfare provisions

should be firmly based on scientific data. But with mutilations we do not necessarily regard scientific proof to be essential. This would be so when a practice is not soundly based on animal husbandry considerations or where a mutilation does not reduce the overall incidence of suffering. Mutilation can, therefore, be considered harmful without scientific proof.
Our aim is to prevent unnecessary mutilations, and we regard them as unnecessary if the desired effect can be achieved by other reasonable means. We think that the more severe the mutilation the more it must be seen to benefit the animals if it is to be accepted. Those are our general principles. I hope that I can show—

Mr. Burden: I find it difficult to understand how the hon. Gentleman can say that the more severe the mutilation the more it must be seen to benefit the animals.

Mr. Moyle: If the hon. Gentleman, who takes a great interest in these matters, listens until I explain the matter further and explain how we approach the problem, he may have a greater understanding of the propositions at the end of my speech than he has now.
I turn to the tail docking of cattle. We are seeking, broadly speaking, to prohibit this operation. We do not consider that rigorous scientific proof is required to show that cattle without tails suffer unnecessarily. Nevertheless, there is scientific evidence to the effect that they would endure increased irritation and possible infection by insects. Some may claim that docking of dairy cows results in improvements in udder cleanliness and a reduced incidence of cracked teats, but these desirable objectives may be achieved without so drastic a measure as removing the tail.
Those hon. Members who are familiar with the welfare code for cattle will know that it recommends docking only when a veterinary surgeon advises that it is necessary because of injury or disease. Under the draft regulations docking for health reasons would be allowed when carried out by a veterinary surgeon, and the regulations would have the effect of making the code provision mandatory, if approval is given by the House.
Next there is the surgical castration of poultry, which will also be prohibited, broadly speaking, by the regulations, if they are approved. This is an operation that can result in the death of the bird, and the proposal to ban the operation of surgical castration is strongly supported by the Royal College of Veterinary Surgeons, the British Veterinary Association and many welfare organisations. If the operation is abolished the scope for producing capons will be limited, but in fact very few people practice the operation at the moment, so we do not expect any great difficulty to arise as a result of the ban. In any case birds similar to capons can be produced by use of hormones and special fat-inducing diets.
The welfare code for poultry, already issued, recommends against the practice of surgical castration and the proposed regulation will have the effect of making the code's recommendation mandatory on everybody.
We come now to the problem of the de-winging of poultry. We seek here to substitute feather clipping for de-winging. Operations on poultry to impede flight are normally restricted to the more nervous strains of bird. The object is to prevent losses among the flock as a result of panic, which may occur from time to time. De-winging has been carried out on day-old poultry by removing the terminal wing joint, usually of one wing only, I should stress, or alternatively the main wing tendon may be severed. Both these operations result in a permanent mutilation and involve sensitive tissue. The case for prohibiting these is based on the ready availability of an alternative method which is, basically, clipping the flight feathers of one wing, which is almost as effective. It is not a permanent way to prevent birds flying in panic, but it can be practicable. Furthermore, the need for de-winging has in any case been reduced much in recent years through the development of strains of bird less likely to panic. We believe that the practices we propose to ban are no longer necessary. The welfare codes for poultry come out against de-winging, and instead recommend feather clipping to reduce the effects of flightiness.
Finally, on the first of the two draft sets of regulations, we come to blinkers, which are used to limit the forward

vision of poultry in order to prevent them from attacking one another. The welfare code recommends against the use of blinkers which may cause injury and advises against their use except as a last resort and when it is clear that without them there would be more suffering in the flock. Blinkers are used only on a small number of broiler breeder birds.
When my right hon. Friend the Member for Anglesey was Minister of Agriculture, he asked the Farm Animal Welfare Advisory Committee to re-examine some of the original welfare code recommendations about which the House had expressed concern. This re-examination included the use of blinkers. The Committee found that blinkers had no advantage over other methods of controlling the propensity of birds to attack each other. On the contrary, there were notable disadvantages, one being that attachment of those held in place by a pin involves piercing the nasal septum. This can result in damage, partly from the insertion of the pin, and can cause damage to the bird if it catches the blinkers in the wire mesh of the cage and tries to free itself.
We think that the proposed prohibition is fully justified, but blinkers which can be attached without mutilating the bird will be available for occasional use when other remedies prove to be ineffective. They can have plastic blinkers which are occasionally used by a veterinary surgeon and which do not require a pin through the nasal septum.
That completes the tally of mutilations which we proposed to prohibit under the Cattle and Poultry Regulations. Two things emerge. First, none of these mutilations is practised much in this country. Second, they are practised to some extent and our farm livestock would be better off without them.
Turning to the second set of regulations, our approach to the docking of pigs will be somewhat different. We will allow it in certain circumstances and for certain purposes. I would remind the House that my rt. hon. Friends have made the Docking of Pigs (Use of Anaesthetics) Order 1974, which has also been laid before Parliament and is subject to annulment on a resolution of either House. The order and the regulations are complementary.
We are not proposing a prohibition of pig docking as is the case with cattle. Instead, we are introducing a control where none has hitherto existed, and we consider that what we are proposing will be a sound practice. Docking is one of the principal practices adopted to control tail biting in pigs. This vice is widespread and causes considerable suffering. I am advised that the pig readily becomes bored and when he does so starts biting the tails of his neighbours. Removing the tails swiftly, neatly, humanely and skilfully is a way of eliminating that suffering.
There have been many different attempts to tackle the problem, but none has been as effective as docking of tails. Giving pigs toys to play with or more straw for bedding have been attempted but have never quite been successful. We dislike mutilations in general and we are reluctant to endorse them unless it is absolutely necessary. Nevertheless, we have considered that it is essential that the docking of pigs should take place so as to prevent tail biting.
In the young pig up to about seven days of age the tail has little or no sensitivity and a quick clean cut is no more than a minor operation. In older pigs the tissue of the tail becomes more sensitive and we consider that the services of a veterinary surgeon and the use of anaesthetic are essential safeguards against unnecessary suffering.
We believe that it would be right to continue to permit preventive tail docking of pigs not more than seven days old and to allow a layman to do it without the use of an anaesthetic. After that period a veterinary surgeon should be permitted to dock older pigs and he should use an anaesthetic for the operation. The order places a restriction on the method to be used and in either case requires a quick and complete severance of the part of the tail to be removed.
These proposals fit in well with the general principles that I outlined. We are dealing with a situation—and this might be of interest to the hon. Member for Gillingham in view of the intervention that he made—in which greater suffering can occur if this mutilation is not permitted. As much as we should like to dispense with all tail docking

there is at present no case for a complete prohibition.
Somebody has inserted in this speech the phrase that it is a case of "spare the tail and spoil the pig". I claim no paternity for that phrase but it might be a short phrase that will allow hon. Members to bear our argument in mind.
A considerable amount of research into the cause of tail biting has been carried out in recent years in many countries, and particularly in Europe, and when positive results become available we shall be in a position to reconsider the matter. Until then we consider that the control that we propose will do much to improve welfare standards in pig husbandry along with the welfare code recommendation for this species. That recommendation is that docking should not be carried out unless prescribed by a veterinary surgeon and that is, of course, unchanged.
I am grateful to the House for the attention which it has given to me in moving these orders. It may be, with the permission of the House, that I would like to address it again after hon. Members have made their contributions. It may be that they will raise some matters to which answers will be required.

10.34 p.m.

Mr. Peter Mills: The Conservative Party welcomes these orders. We welcome the start of a comprehensive range of similar orders dealing with animal welfare. I welcome them especially because I know that some of my colleagues who were in the Ministry of Agriculture, Fisheries and Food had a hand in their preparation.
The real problem in the pig world at present is not the prevention of cruelty but the farmers' financial return. I appreciate that I should be out of order to continue with that matter, but I believe that something must be done to improve their position. I draw the Minister's attention to the exceedingly difficult position facing pig farmers.
The prevention of cruelty to animals is a worthy aim. We support wholeheartedly any move in that direction. People today, and rightly so, are sensitive to animal welfare. When we think of the cruelty that is going on in the world including human beings, it is gratifying to know that we have some say over the control


of cruelty to animals. That is why we very much welcome these orders.
I ask the hon. Gentleman to bear in mind that it is important to remember that this aim should not be confined to this country but should be applied to the other members of the EEC. I believe that we must work towards the harmonisation of our laws on this subject in the Community. What consultations did the Ministry have with its colleagues in Brussels? How far have we got in harmonisation of these matters? How do the standards we are seeking to introduce compare with those elsewhere in the Community? It is important that we should be as concerned about animal welfare in the Community at large as we are with it in this country. I must not develop this line of argument, but it is important that we as individuals should care and be concerned about animal welfare wherever animals are.
The welfare of livestock is very important to a farmer. Farmers do care, in spite of what some people say. It is in their own interest that their animals should, as we say in the farming world, do well, and they do not do well if there is any cruelty or irritation or any problems. There is far too much loose talk to the effect that farmers do not care and are only interested in the financial return. That is not my experience in many years of farming. It is true that the odd farmer might be cruel, and if so he must be punished. That brings me to the question of the fines involved in these provisions. What is the maximum fine for contravention of these orders?
I have castrated many hundreds of pigs —a little more violent operation than nipping off the tails. I have found that up to the age of 8 days is about right. After an operation done up to the age of 8 days, whether it is taking teeth out or docking tails or castration, the little piglet soon goes back to what we call the "milk bar" and forgets the problems and difficulties. So I wholeheartedly agree that the stipulation about age is about right.
The vice of tail biting is very serious. First, the conversion rate of the pig goes down, which is a serious matter these days as feed is so expensive. The old method was to paint the tail or give them toys, as the hon. Gentleman said. In fact, the most successful method was to leave an old chain link tied up so that

the pig had something to bite at all the time.
Let us admit that to be a pig is quite a boring operation. A pig may be well housed and well fed, but it just sits there full of food and that means that it gets slightly irritable. It will then start this unpleasant habit of tail biting. The hon. Gentleman is quite right—it is caused by boredom. What research has been done into the vice of tail biting? I understand from a colleague who was at the Ministry in the last Government that work was being done on research. What is the position now?
In the end, I believe that most farmers have reached the conclusion that the removal of the tail at an early stage is best. It is quite effective for the consumer as well. Anyone who has been concerned with the slaughtering of pigs knows that, in the old days, one could see a large number of pigs whose tails and quite a bit of leg were damaged and poisoned by the effect of the vice of tail biting, with the loss of good pork meat.
Regulation 2(1) reads:
the docking of the tail of a pig which is livestock for the time being situated on agricultural land is prohibited".
Does that apply only to pigs on agricultural land? What about the intensive pigholding which is perhaps in an old warehouse or on a concrete slab? Does the regulation cover that?
Regulation 2(2) refers to the rendering, in emergency of first aid. In all my experience of pig farming I cannot think of an emergency when a pig caught his tail in something. If the animal is ill that is a different matter.
Again, we welcome the regulations on cattle and poultry. The remarks I made at the beginning about the pig and his tail also apply to the bullock. It is not the tail that worries the farming community but the carcase price. I have always been against the docking of the tails of cattle. It is an unpleasant operation and cows suffer from the absence of a tail. They are unable to get rid of flies and other insects that irritate them. I am surprised that this problem was not dealt with long ago.
Some owners of large dairy herds find cows' tails unpleasant. It is annoying to be splashed in the face by a tail that is covered in manure, but however an-


noyed one may be, that does not warrant the cow's tail being cut off. Regular trimming and washing of the tail would eliminate many of the problems experienced by farmers.
One other practice that I should like to bring to the attention of the Minister and his officials is the putting of a tape round the tail to number the animal. There are various methods of identifying cows and bullocks. The danger of the taping method is that it cuts off the circulation of the blood and the tail drops off. I am unhappy about that method of identification.
I welcome the regulations on dairy cows and bullocks, but I am not an expert on poultry. I have had little experience of keeping poultry on any of my farms. With modern methods of caponising there is no need to castrate birds. The impeding of flight and the clipping of wings is allowed, but it is unnecessary when birds are housed inside. They do not fly very much. If they get scared they might move quickly into one corner.

Mr. Moyle: The regulations apply to the clipping of wing feathers.

Mr. Mills: I believe that there is a future in breeding birds without any wings at all, because they are not much use for eating. Again, developments in this area would eliminate certain problems.
As for the fitting of blinkers, I wonder what this process is designed to achieve. I have never seen a blinkered bird. The Minister attempted to explain the situation I thought that certain coloured lights, such as a blue or red light in the house, helped to prevent birds fighting and getting irritable with one another. I see no need for the fitting of blinkers.
We welcome these regulations as a real step forward. I look forward to seeing further measures in dealing with animal welfare. I hope that the Minister can answer my questions, particularly that relating to harmonisation of our animal welfare regulations in the Community.

10.37 p.m.

Mr. John Farr: I welcome the regulations and endorse the points made by my hon Friend the Member for Devon. West (Mr. Mills), but I should like to take this opportunity to

put one or two fresh matters before the House.
We see from paragraph 2 of the regulations dealing with the docking of pigs that certain actions require to be undertaken by veterinary surgeons which are not required to be undertaken at present. I hope we shall be given some idea of the extra number of veterinary surgeons who will be required because of the extra legislative obligation which is to be placed on their profession. I hope we shall also be told whether the additional veterinary surgeons will be found. I understand that veterinary surgeons are becoming rarer and rarer; their time is fully occupied at present. Perhaps the Minister will say what response he has had from the British Veterinary Association in the face of these requirements.
The Minister said that these regulations amounted to a form of consolidation of the codes of practice. I welcomed the code when it was introduced. Perhaps the Minister will say what we may expect in the way of new orders of this nature which may now be imminent. It is all very well to say that not many people will be required to castrate pigs over seven days old, but in the not too distant future we may also have to cope with other dehorning and castration requirements.
In addition to my concern about the lack of vets to deal with these extra burdens, I am worried about the effect of these obligations in the present state of the livestock industry and wish to know how the farmer will afford these additional vets' bills. We are being badgered from pillar to post with increased petrol charges, overdraft rates at a record level, and all the rest of it. The huge veterinary bills which a farmer has to bear are likely to be augmented if we face a succession of regulations of this kind. Furthermore, large wage claims are likely to be imminent. It is just not acceptable that further burdens should now be placed on farmers' shoulders.
The Minister gave a clear and forthright explanation of the regulations but did not (ell us much more than we might have been told had my hon. Friend the Member for Devon, West been called on to present them. It was really a Ministry brief, which the hon. Gentleman presented


very well, but will he tell us whether the NFU has been consulted, whether the British Poultry Federation has been consulted, and what are the views of the Meat and Livestock Commission? If he has not consulted them and ascertained their views, why not?
I have no doubt that my hon. Friend the Member for Gillingham (Mr. Burden) will point out, if he succeeds in catching your eye, Mr. Deputy Speaker, that it is strange to see two sets of regulations before the House which refer continually to a Cruelty to Animals Act which is 98 years old. Clearly it is a good Act, and it must be an effective one, but if this Government wish to establish their authority on a non-party basis they could do a great deal worse than bring forward a non-controversial measure in the shape of a Cruelty to Animals Bill.
I conclude by repeating that it is not possible for the farming community to absorb many additional veterinary bills. It is being held down by its debts at the moment. Many farmers do not know where to turn. The production of livestock is a long-term business, and considerable outlays have to be made. What is more, there is no guaranteed return to the producer. There is no platform under the end-product. Yet these regulations will give rise to additional veterinary bills which the farming community will have to meet.

Several Hon. Members: Several Hon. Members rose—

Mr. Deputy Speaker (Mr. George Thomas): Order. I was very generous— I do not know whether I was not foolishly generous—to the hon. Member for Harborough (Mr. Farr). Since so many hon. Members wish to speak in this short debate, I hope that they will confine themselves to the docking of tails, and so on, with which these regulations deal.

10.42 p.m.

Mr. Phillip Whitehead: I shall not trespass on your generosity unduly, Mr. Deputy Speaker. I intend to be very brief and to take up one or two of the matters which the hon. Member for Harborough (Mr. Farr) discussed.
I agree with the hon. Gentleman that where the regulations refer back to the 1876 Act it is high time, for many reasons unconnected with this debate and which therefore we cannot pursue now,

that the legislation was brought up to date by the introduction of a new measure.
I also welcome the regulations and the consolidation within them which there is for the codes of animal welfare which many of us, notably the hon. Member for Gillingham (Mr. Burden), have called for in debates over past years. However, I differ from the hon. Member for Harborough in emphasis when he advances the argument that farmers will find these provisions hard to bear; that they will involve additional expense; that perhaps it is not done by their competitors; and that other Europeans are not so stringently overborne.
There is a mood in this House and in the country for much more stringent controls over cruelty to animals, which extends not merely to the mutilations discussed in the regulations but also to the questions relating to where and how animals are kept, what injections they may be given, and matters of that kind. All the arguments which we heard rehearsed in the last Parliament in our debates on the export of live animals do not hold water.
I welcome these regulations. In the case of the ones concerning cattle and poultry there is little more to be said after listening to the speeches of my hon. Friend the Parliamentary Secretary and the hon. Member for Devon, West (Mr. Mills). I do not believe these practices to be widespread. Almost all the farming community abominate them and will not be sorry to see them go.
I make one point for the unfortunate pig. It appears that the pig is the only animal covered by my hon. Friend's preamble, in which he said that one had to be certain that the mutilation caused was alleviating a greater suffering. My hon. Friend went on to say that the pig became easily bored. As we know, the pig is a neurotic animal, though highly intelligent. It is a much maligned animal. If one cuts off the pig's tail, one does not remove the cause of the boredom. All that one does is to stop other pigs biting its tail; but they may well do other things.
The hon. Member for Devon, West, with his lengthy experience of castration, and so on, could perhaps tell us about the vice of tail biting. But I should like to know whether, in the research which has so far been done into that vice, there


has been established any causal connection between the conditions in which pigs are kept and the spread of the vice. This is a serious matter. From Regulation 2(1) of the regulations I derive rather more comfort—but for different reasons —than does the hon. Member for Devon, West. It seemed to me that one could read that regulation to suggest that in situations in which pigs were kept in intolerable and overcrowded conditions they were not subject to the freedom from tail docking which the order in general gives them. Whether or not that is so and whether that is the reason for the particular wording of that regulation I do not know. Perhaps my hon. Friend the Minister can enlighten me.
These regulations have made a significant improvement in the conditions in which animals will be kept by eliminating many of the more senseless mutilations. If we now keep clearly in mind the reasons why tail docking is carried out and why it should continue, and can satisfy ourselves that these are valid reasons—I am not sure whether my hon. Friend the Minister advanced valid reasons—we shall have gone some way at least, on the point about mutilations, to ensure that animals are kept in better conditions and endure less suffering in future.

10.47 p.m.

Mr. F. A. Burden: I heard the Minister refer to the Brambell Committee, in the setting up of which I think I can claim to have had some influence. There is no doubt that there is a great and growing feeling in the House and the country generally that farm and other animals should not be subjected to unnecessary suffering. It is my view and, I think, the view of most hon. Members, that it is not the fanatical who influence opinion in these matters but people who realise that farm animals are bred and reared for human use but that, because of that, we must treat them with the utmost possible kindness.
We all welcome the regulations. I remind the Minister that the Brambell Committee reported in April 1965. These regulations have come out of that report, but it has been a very slow period of gestation and production. However, it is a start. I hope and believe that the hon. Gentleman will tonight be able to

assure us that other measures proposed by the Brambell Committee will appear in the near future to assist in ensuring the welfare of farm animals in particular.
The House is at its best when it discusses non-party matters. Certainly, animal welfare is a non-party matter. It stretches right across the House, as it does across the country. This augurs well for the future.
The regulation relating to the docking of pigs states that pigs shall not be docked other than by a veterinary surgeon after they have reached the age of seven days. We all accept that. It is a considerable move forward. But the statement in Regulation 2 that
the docking of the tail of a pig which is livestock for the time being situated on agricultural land is prohibited, unless
and so on, is ambiguous. Let us have a more precise description of agricultural land. The pig could apparently be taken into a garden next door to the agricultural land and there the operation could be performed without any penalty. That would be within the law, because it would not be on agricultural land.
My hon. Friend the Member for Devon, West (Mr. Mills) raised the point about buildings that are not on agricultural land. That wording should be amended to make clear to everyone who might be engaged in pig husbandry precisely what it means.
The other point about which I am concerned is that when the pig is up to eight days old any stockman can remove its tail. My hon. Friend the Member for Harborough (Mr. Farr) said that because veterinary surgeons will be called upon to conduct the operation after the pig has passed the age of eight days, and that will be costly, the gates may be thrown open for a wholesale docking of pigs' tails before they have passed that age. Might not that mean that there will be a tremendous increase in the number of pigs docked before they reach the age of eight days?
I remind the Minister that, as well as his own Ministry officials, the British Veterinary Association is against mutilation, and we welcome that fact. There is no doubt that hon. Members are also against mutilation, except in extremes, when it has been proved to be necessary, and it could not be proved to be necessary in most cases.
One hon. Member asked how the habit of tail biting originated, and whether there had been any research. It was stated at a conference that there was a growing awareness that tail biting and the provision of bedding were closely linked. Professor Ekesbo has demonstrated that tail biting is seven times as prevalent among pigs without bedding, and a recent publication by Lennart Backstroom in Sweden contained a great deal of information on the importance of bedding to good pig husbandry. I suggest that the Minister makes that known to his officials and veterinary staff, so that the information is conveyed to pig rearers. That would considerably reduce the need for docking pigs. It would be done only in extreme cases after they had passed the age of eight days. It would have to be done by a veterinary surgeon, but if the proper husbandry conditions were provided, as suggested by those eminent researchers, there would not be the tremendous cost expected by my hon. Friend.
I turn to the regulations concerning the mutilation of cattle—the docking of the tails of cattle and the castration of a male bird by a method involving surgery. I am sure that there are other methods which are equally efficient. We must welcome that, because this is a most dangerous and painful operation. I applaud the decision to stop the de-winging of fowl. I was appalled, some years ago, when the Chairman of the Farm Animal Welfare Advisory Committee said that this was still quite common and was carried out in deep litter houses because birds could become frightened and would fly. This caused loss of weight, and so on. So that I could understand more clearly precisely what the operation meant I asked what would be the equivalent operation on a man.
His reply was that it would be equal to removing the fore part of the arm, from the elbow. That is a shocking mutilation, and obviously had to be stopped. I am delighted that these regulations will stop it. At the same meeting the Chairman of the Farm Animal Welfare Advisory Committee spoke of the pain and distress that could be caused by blinkering chickens. I am delighted that this has been stopped.
There is one omission in the regulations relating to pigs which I regret. I hope

that the Minister will look into it. The British Veterinary Association and all animal welfare organisations, and vets generally, are quite definite in their opinion that the punching of pigs' ears should be stopped by law—that it is a nasty, bloody and painful business, and that there must now be alternatives. 
My hon. Friend the Member for Harborough referred to the number of veterinary officers in the Ministry. Quite fortuitously I received a Written Answer on this subject yesterday. Obviously these regulations will have to be supervised if they are to be meaningful. I had asked the Minister of Agriculture, Fisheries and Food:
how many qualified veterinary surgeons arc now employed by the State Veterinary Service; and by how many this falls short of the full complement.
This was the reply:
529 qualified veterinary surgeons and 22 research officers with scientific qualifications are employed full time against a total complement of 690. The shortage of 139 is partly offset by the employment, on field duties, of some 65 veterinary surgeons as temporary veterinary inspectors on a daily fee-paid basis." —[OFFICIAL REPORT, 10th June 1974; col. 454, Vol. 874.]
That means that even using those men to the full there is still a shortage of 74 veterinary surgeons in the Ministry. I should like the Minister to tell the House what steps are being taken to increase the numbers and bring the service up to full strength. I hope he will tell us how, with these regulations, the requirements under the codes of farm practice generally will be supervised and how they will be affected, if adversely, by the extra duties imposed on veterinary officers in seeing that these regulations are complied with.
I am sure that all hon. Members, and many of the public, will be grateful to the Minister for bringing forward these regulations, which were set in hand by my right hon. Friend the Member for Grantham (Mr. Godber). He first asked for information from interested bodies as far back as June last year. This shows very well how animal welfare cuts right across party politics, to the great benefit of this House and of animals.

11.1 p.m.

Mr. David Mudd: I regret that tonight we are discussing prevention of cruelty to animals


measures rather than measures preventing financial cruelty to their producers.
I was most impressed, as were all hon. Members, to hear my hon. Friend the Member for Devon, West (Mr. Mills) assure us at some length about the ability that young piglets have speedily to ignore the pain and forget the problems of having been docked, and to rejoin their fellows. Pig producers in Cornwall wish that they had the same ability to forget that is seemingly enjoyed by young piglets.
One does not ignore the ability of the Government in their cruelty to pig production. No Governments have done more than this one to reduce cruelty to animals, simply by discouraging production in British agriculture.
I should like to put one specific point to the Government. I am concerned, as was my hon. Friend the Member for Gillingham (Mr. Burden), about the docking of pigs up to the age of seven days, and I wonder whether the Minister can give slightly greater reassurances than at present exist on the question whether the operation up to seven days can be carried out by unqualified people without supervision, or whether it is necessary for a producer to serve notice of time and place so that there can be at least central supervision of the operation taking place.
I want to take the Minister up on another remark he made about poultry, when he referred to the use of blinkers to prevent forward vision. I express the hope that his Ministry, if it needs forward vision, will shed the blinkers that it has worn for nine weeks.

11.4 p.m.

Mr. Charles Morrison: I want to ask one question and emphasise a point, but first I join in the welcome for the introduction of these regulations.
It is ironic that the regulations, both entitled "Welfare of Livestock", should be introduced by a Government who have demonstrated less interest in the welfare of livestock, in the wider sense, than any Government in post-war history.
I am concerned about the ambiguity in both orders. My hon. Friends the Members for Devon, West (Mr. Mills) and Gillingham (Mr. Burden) referred to livestock on agricultural land. I wish to

refer to an earlier point in the same regulation. Regulation 2, on the docking of pigs, reads
the docking of the tail of a pig which is livestock for the time being situated on agricultural land
and the other set of regulations refers, also in Regulation 2, to the case where
the animal or bird in question is livestock for the time being
When is an animal or a bird not livestock for the time being or at any time? May we have clarification on that point? This seems to be extraordinary drafting and totally unnecessary verbosity.
Farmers will be amazed that a Government which rightly shows so much sympathy towards the proper treatment of pigs, cattle and poultry can show so little for the plight of the producers of those animals.
I wish to stress the point made by my hon. Friends about vets. The regulations will increase the obligation put upon the State Veterinary Service, assisted as it is by vets from the private sector. As my hon. Friend the Member for Devon, West pointed out, these are only the beginning, and other regulations will follow in due course. They will place ever greater obligations on the service. How will the vets cope, and what are the Government proposing to do to provide more vets in the service
The obligations of the regulations could add marginally—I stress "marginally"—to the costs of producers. There are, however, straws which break camels' backs, and I hope the Government will soon display as much concern for producers as they are displaying for the live stock.

11.9 p.m.

Mr. Richard Body: There will be widespread gratitude to the Minister for the way he has explained the regulations. I am concerned only with the one dealing with pigs. I was somewhat startled at some of the points made by the Minister. He said that it was essential to continue the docking of pigs, because the vice of tail biting was widespread. I am a pig producer, and over the years I have produced and marketed many thousands of pigs. I can think of only one case of tail biting on my farm, and that was 10 years ago.


I had been on holiday, so had my manager, and we had a relief man in charge who obviously was not up to the job. When we returned we found that in one pen there had been an ugly outbreak of this vice. I immediately turned the pigs out into a field. The curious thing was that it was not boredom which drove them to it but something in the diet. There was a curious spectacle of their nose-diving into the earth as if they were looking for some kind of mineral. Within 24 hours the vice had gone, and after three days they were put back in the pen and all was well.
When the hon. Gentleman attributes all this to boredom he is talking rather old hat. With due respect to those advising him, the point about boredom was the current wisdom about a decade ago. The matter is now far more complicated. The trouble is partly to do with sophisticated compound feeding stuffs, and I suspect that the high protein content makes animals more aggressive than those which we knew when we were children. The hon. Gentleman may recall that in his youth there was hardly ever any tail biting on Welsh farms. It may be a genetic factor with certain strains or breeds of pigs. I hope that those who advise the hon. Gentleman will consider the deeper possibility and will not repeat the assertion that the vice is widespread.
I cannot believe that to tail pigs serves a useful function. It may be a guide to the management and may indicate whether the pigs are being well looked after. I cast doubt on the way the regulations have been phrased. If it is right, as the hon. Gentleman says, that pigs have this propensity, we can be sure that they have not got it in the first week of life. Their inclination is then different, and therefore the propensity develops much later, always after weaning and probably when they are three or four months' old.
I feel, therefore, that the regulations will permit—indeed, almost encourage— the docking of tails, on the assumption that tail biting will develop some weeks later. That is a wrong assumption. It is thoroughly bad practice for pig producers to embark on docking of pigs on the assumption that biting will occur at some later time. I hope, therefore, that those who advise the hon. Gentleman

will consider some of the philosophy behind this action.

Mr. Peter Mills: I agree with much of what my hon. Friend says, but surely it means that we ought to have more research into this matter before we proceed?

Mr. Body: Research is simple, and 1 have done a lot of it. The Parliamentary Secretary should make an arrangement to come to a farm where a great deal of research has been done on this matter over the years. He will then see that there has never been a case of tail biting, other than that which I mentioned, which happened 10 years ago. There is a case for research, but in a well-managed pig unit tail biting does not happen—and certainly should not happen. I like to see tails on pigs. Where there is tail biting there is something radically wrong with the management of the herd, or with the diet—or a lack of straw bedding may be a factor.
I greatly regret the whole practice of docking tails and I hope that the hon. Gentleman will never again say that it is essential and should be allowed to go on. It is not essential. It is necessary only when the farmer is not doing his job properly.

11.14 p.m.

Mr. Moyle: With permission of the House. I am encouraged by the overwhelming basic support given to the regulations, which augurs well not only for them but for the continuing and comprehensive policy of animal welfare on which we hope to embark as a result of the codes, reinforced by regulations from time to time.
I am afraid that I must disappoint the hon. Member for Gillingham (Mr. Burden) by saying that we have no specific plans for further regulations. But the Farm Animal Welfare Advisory Committee is considering the possibility of further regulations. As it brings forward advice to us we shall draft regulations and lay them before the House.
I cannot tell the hon. Member for Devon, West (Mr. Mills) precisely whether our standards are being matched in the EEC, but I shall see what information I can get for him. Harmonisation has not proceeded particularly far, but the machinery for securing it is in full flood.


We are in contact with our opposite numbers on farm animal welfare matters through regular machinery.

Mr. Burden: Does the Minister agree that whatever delays there may be in the Community in improving the welfare of animals must not inhibit our intention to proceed as quickly as possible?

Mr. Moyle: That argument would receive general assent, I think, but I am describing the situation as it is at present.
As for penalties, Section 2 of the parent Act says that a breach of these regulations will lead to a maximum fine, on summary conviction, of £100, or to three months' imprisonment, or both. In the case of a repetition of the offence, the maximum fine may be doubled.
The hon. Member for Gillingham quoted a Swedish professor—whose name tripped off his tongue with greater facility than it would off mine—and his research into tailbiting. My officials were discussing his research with him only a fortnight ago. They are not convinced that his work is entirely applicable to United Kingdom conditions. Experiments have been made with better bedding, and so on, and have not been entirely successful.
We were all grateful to the hon. Member for Holland with Boston (Mr. Body) for suggesting a considerable number of lines of research. I am sure that in the initial stages of drawing up a programme those common experiences will be important guides for our scientists. The tale he told us paid an unsolicited compliment to his skill as a pig raiser rather than undermined my argument that there is a substantial amount of tail biting and that we need regulations to meet it.
We are fairly confident that the definition of agricultural land will cover the sort of problems that hon. Members have raised. If pigs are moved off non-agricultural land the Protection of Animals Act 1911 comes into effect. That Act makes it an offence to cause unnecessary suffering of any sort to animals. The people operating on animals would not have the protection which is afforded them in the orders under that Act.
The position is that Ministers propose and courts dispose. It is always possible —whatever Ministers say, and however

their officials advise them—for the courts to come to a conclusion that is not intended by an Act. In practice, we shall have to watch the matter and bring forward amending legislation as and when necessary.

Mr. Graham Page: As the regulations stand, a coach-and-four could be driven through them—for example, by removing an animal from agricultural land on to adjoining land and there performing the operation. I appreciate that the regulations copy the words of the Act, but that does not mean that the Act cannot have its i's dotted and its t's crossed. Will the Minister consider a supplementary order to prevent the removal of animals from agricultural land for the performing of operations?

Mr. Moyle: I shall require notice before answering that question. The right hon. Member for Crosby (Mr. Page) has brought into consideration the effect of the Protection of Animals Act 1911. That makes it a crime to perform certain acts on non-agricultural land which would have the effect of causing what we think the courts would consider to be unecessary suffering to animals.

Mr. Page: That Act is not so specific
as the regulations. It would help if they were clarified so as to prevent their evasion.

Mr. Moyle: We shall bear in mind that comment. It is not necessarily a bad thing for a legal provision to be nonspecific. Sometimes it helps when the provision put forward is fairly general. That means that a number of matters can be brought within the principle. That may also help the legal profession. I shall require notice of the point that the right hon. Gentleman has made. This is a matter which is concerned with bad animal husbandry rather than anything else.
On the general shortage of veterinary surgeons, the hon. Member for Harborough (Mr. Farr) will not be the slightest bit surprised to learn that the Government are well aware of the fact that there is a major shortage of veterinary personnel in the Government service, and that unless we take action to remedy that shortage many of the provisions that we are discussing, and farming policy generally, will be difficult to apply.
My right hon. Friend is very concerned with the shortage of veterinary surgeons and is hoping to take action to remedy the problem to which the hon. Member for Harborough has drawn attention. The problem is compounded somewhat by a slight shortage of veterinary surgeons in private practice.

Mr. Charles Morrison: It seems that almost every successive Minister of Agriculture, Fisheries and Food has been hoping to take action regarding the State Veterinary Service and vets generally. It is high time that a Minister, whether Conservative or Labour, took action instead of hoping to do so.

Mr. Moyle: I am in no position to announce precisely what we shall do. That is why I put my words in such a form. No doubt the contribution made by the hon. Member for Devizes (Mr. Morrison) will be considered along with the points raised by other hon. Members. We are faced with a serious problem and the hon. Gentleman generously recognised that it was in existence under the last Government. We must try to produce a solution.
I hope that the hon. Member for Gillingham will not be too despondent about the slow process. After all, we had the 1965 Report and then the 1968 Act. This is probably a commentary on the reference the hon. Gentleman made to the 1876 Act, which has now been supplemented by the 1968 Act, under which the welfare codes and regulations are made, so we are not wholly in the hands of an Act nearly 100 years old; we are bringing it up to date. We are making progress all the time. There have been a number of stages in the process.
Some worry has been expressed about the fact that pigs may be docked in large numbers before the seven-day period. It is necessary for a vet to be consulted before the operation takes place, although it is true that a layman can do it up to that stage. Therefore, we are hopeful that pig raisers of the skill and level of knowledge which the hon. Member for Holland with Boston mentioned will not rush into mass docking of tails. In any case, they have to consult a vet to carry out the operation.

Mr. Burden: Is the hon. Gentleman saying that although a layman can carry

out the amputation or removing of a piglet's tail before it reaches the age of eight days it has to be done on the advice of a vet?

Mr. Moyle: That is what I am advised.

Mr. Burden: I think that the hon. Gentleman is wrong.

Mr. Moyle: In that case, I shall certainly consider the matter further and write to the hon. Gentleman—but that is the advice I have been given.
Emergencies may arise where portions of animals may get caught in fences or machinery, and so on, and they may get their tails damaged, in which case the vet may come in and have to perform an operation. On another point, a bird, for example, cannot be livestock when it is being raised for game purposes. That relates to the phrase to which the hon. Member for Devizes referred.
I think that I have covered all the points raised in the debate apart from the one raised by the hon. Member for Gillingham, about which I shall write to him.

Mr. Peter Mills: If the hon. Gentleman will give way to me he may be able to receive a note which explains the position to him. I think it is a fact that up to eight days one does not have to refer to a vet at all. I should be surprised if that is not so. But even so, it is a serious matter, because most good stockmen would not consult their vet for castration or the removal of a tail.

Mr. Moyle: The hon. Gentleman is right. It is only recommended, and not required. We are recommending that it be done and we hope that it will have its effect. Obviously, it would be wrong for people to go in for mass docking of tails purely on the supposition that later in the pig's life it might indulge in these vices.
A number of points were raised about the subject of agriculture generally which I felt were outside the scope of the regulations. If the Opposition had turned their minds to the support of agriculture instead of having the General Election, their farming constituents might be somewhat better off now than they are.

Question put and agreed to.

Resolved,
That the Welfare of Livestock (Cattle and Poultry) Regulations 1974, a draft of which was


laid before this House on 14th May, be approved.

Resolved,
That the Welfare of Livestock (Docking of Pigs) Regulations 1974, a draft of which was laid before this House on 14th May, be approved.— [Mr. Moyle.]

ADJOURNMENT

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Golding.]

JUVENILE OFFENDERS (SCOTLAND)

11.30 p.m.

Mr. James Dempsey: Although the hour is late, I am grateful to have the opportunity of drawing attention to the lack of accommodation for the treatment of juvenile offenders, not only in my constituency, but throughout west Scotland. An effective deterrent is essential, otherwise offenders will continue to offend against society. Some of the offences with which I am concerned are increasing in number in my part of the country. They involve the wanton, malicious and unnecessary destruction and desecration of property, and even attacks on people. It is not unusual in my part of the country for schools to be flooded, for public buildings to be set on fire, and for bowling greens to be dug up and ruined and fixtures prevented from being implemented. These are but some of the illustrations which focus the seriousness of this type of offence against society in my part of the country.
If time permitted, I could weary hon. Members with a recital of incredible damage to properties. Municipal houses, once vacated, have to be boarded up in many parts to prevent not only the wanton destruction of the glass windows but interference with the gas and electricity supplies and the flooding of homes upstairs, with disastrous consequences for people downstairs.
When young people are convicted for perpetrating and committing such foul deeds against society, it is tragic that there is almost nothing that can be done with them. There are only four ways of dealing with an offender. First, he can be

sent to a List D school. In January we were informed that there would be no vacancies in List D schools until June. Now we are told that it will be September before there are any vacancies. Therefore, an offender cannot be sent to a List D school for corrective treatment.
The second possibility is to send the offender to the assessment centre in the county. But again the centre is full up, and there is no hope of admission.
The third possibility is to send the offender home, for supervision by the social work department—but that department tells us that it does not have the necessary officers to carry out personal supervision.
The last possibility is to send the offender to the police, to be given a stern warning not to do it again. This is occurring so regularly that few offenders pay attention to what the police say, so more offences are committed. I have had cases concerning boys who have committed the offence of destroying public property and there has been no way of supervising them. Therefore, they are not sent to institutions but returned home. They are no sooner home than they commit other offences, including the burning of schools. If this situation continues we shall have no deterrent at all.
Recently, a boy was convicted of five offences. There was no room at the inn, so he was sent home. Within days he committed three more offences. He was brought before the children's panel by the police. His father appeared at the hearing and pleaded for his boy to be taken away and placed in a List D school. The children's panel could do nothing about it because there were no vacancies at the school. The boy was allowed to go back home to be supervised by his parents, but he went in at the front door and out at the back door to commit other outrages against the community.
Last week I had a letter from a constituent, asking for my help. He said that for two years he had been the focus of juvenile misbehaviour and misconduct. He listed all the offences that had been committed against him, his family and his property. He claimed that the police were powerless. That is true because, although the police are doing their utmost, unless we can provide an effective deterrent to convince these young offenders that crime does not pay and they must


not do it again, the actions of the police, no matter how public spirited, are abortive.
I have known the police in my constituency to do an excellent piece of detection, and catch and have convicted young people responsible for doing thousands of pounds worth of damage to industrial offices, schools and other public buildings. But that is all abortive unless there is some authority to take the offender in hand to ensure that he will be taught a lesson and that he will never commit such offences again.
That is why the police are the butt of the young offenders, who put their fingers to their noses at them and treat them with disdain. They know that there is no room at the inn and all that the police can do is to warn them.
We recently passed the Social Work (Scotland) Act, in which we promised to provide treatment and accommodation for such offenders. The Act provided for treatment centres, but they have not yet been introduced in my part of Scotland. It is obvious that unless we provide treatment the law will be made a farce. Unless we can teach these young hoodlums a lesson by providing the essential corrective treatment, in the years that lie ahead we shall be afflicted by these shocking problems of vandalism, attacks on persons, the carrying of dangerous weapons and a diminution of the rule of law in our society. We should not have included such provisions in the Act without also providing the resources to pay for these institutions.
I am knowledgeable about List D schools because, as a member of the local authority, I was attached to many committees which dealt with them. In those days a boy had to prove his worth in a List D school. He had to prove to those in charge that he could be trusted to be sent home for the weekend or for a holiday. But today, in spite of all the wanton destruction that occurs, we seem to have grown soft. The young offenders seem to get out of the institutions without difficulty. I know of boys who walk out of the institutions on Friday and do not come back until Monday. Security has almost come to be regarded as a bad word, like the word "punishment" in relation to young persons. I am referring not to those who commit a first offence,

but to those whom one could describe as habitual offenders.
The only way to deal with these offenders is to take effective and rational action. Perhaps my hon. Friend will consider confined institutions for these habitual offenders under the age of 16, so that they will not be allowed to go home on any weekend when they feel like taking some time off. Some of them are treating these schools as a pale reflection of a Butlin's holiday camp. We are inclined to err on the side of the offender and to overlook the suffering humanity who are at the receiving end of these offences.
I hope that my hon. Friend will rethink the whole approach towards the treatment of young offenders to ensure that there are institutions to which they can be allocated, to maintain an effective deterrent, to teach them that crime does not pay, and to correct those who can be corrected, in order that they can play a more responsible part in the society to which they belong.

11.42 p.m.

The Under-Secretary of State for Scotland (Mr. Robert Hughes): I welcome this opportunity afforded to us by my hon. Friend the Member for Coatbridge and Airdrie (Mr. Dempsey) to raise the subject of the treatment of juvenile offenders in Scotland and the shortage of List D places. This gives us a chance to debate a problem which is causing a great deal of public concern in Scotland at present.
The concern expressed by my hon. Friend at Question Time on 15th May was underlined by him this evening and I know that his concern is shared by many hon. Members. I assure the House that the Government are anxious to see the problem tackled effectively. This is one of the most difficult and pressing problems in social work in Scotland.
My hon. Friend described in graphic detail the problems of vandalism and wanton destruction in schools, churches, bowling greens, and on public property generally. One does not want to minimise the fact that these things are going on, but I think that my hon. Friend is under a fundamental misapprehension about the work undertaken by social work departments and what happens at children's hearings. He said, for example,


that we convicted young people and had no effective deterrent. There is no provision under the children's hearings whereby young offenders can be convicted. The position is that where offences are committed, the child and its parents are asked whether the offence is admitted. If the offence is admitted, the children's hearing can then decide what is the best form of treatment for the child, bearing in mind his home and school circumstances, and his environment and background.
If the offence is denied by the child and its parents, it is necessary for the sheriff to determine the proof as to whether the child did commit the offence. But in no sense is it a conviction, in the sense that the child is put on trial and is then sentenced. Where an offence is committed with an elder person the child may go before a sheriff court, but that is a different matter and will be treated in a different way. On the general position in relation to vandalism, which is linked to the truancy point, there is no question of conviction and sentence, or of approaching the matter by sending children to a List D school as a kind of deterrent.
The whole aim of children's hearings and social workers is to try to provide for the child in the best possible way and to try to develop methods by which the child can be brought back into society and taught to be a useful member of it.
We know that it is not easy to do. The possibility is that by the time children come before children's hearings there is not much likelihood of a speedy solution by means of the one short, sharp lesson, such as that which my hon. Friend suggests. Over the years before we had the Social Work (Scotland) Act we discovered that the penal system of juvenile courts did not work. If it had worked, there would have been no need to change. The Act was introduced largely because experts felt that the penal system of classing youngsters between the ages of 8 and 16 as criminals and convicting them of offences was not filling the bill.
The intention of children's hearings, in sending children to List D schools, is not to provide corrective treatment in the sense of prison sentences; it is to help children to mend their ways and to fit back into society.
All this does not invalidate my hon. Friend's concern about the shortage of places—and there is a shortage. We face a situation of the kind which is liable to arise in the period following the passage of major social legislation. It is a situation in which there is a gap between the expectations and demands aroused by the legislation and the resources available in response to them.
The provisions of the Social Work (Scotland) Act, which set up the children's hearings, came into operation a little more than three years ago. Since then, a clearer picture has emerged of the range of facilities which should be available for children coming before the hearings, and it is now plain that existing resources do not match expectations.
I well understand the frustration of members of children's panels—it has been expressed in the Press and in letters to hon. Members—over the deficiencies which confront them when they are trying to reach the right decisions in respect of children who come before them. I want to see resources for children extended and diversified as rapidly as possible, not only so that children who have got into trouble may be given a better chance for the future but also so that panel members may derive a satisfaction from their work equivalent to the energy and dedication which they put in.
As my hon. Friend said, much of the recent public concern has been expressed in terms of shortage of places in the List D schools, formerly known as approved schools. It is a fact that the bulk of the demand for residential places arising from the children's hearings has fallen upon the List D schools, although these schools are not the only places able to help children who need residential treatment.
I pay tribute to the staffs of the schools for all that they have done and are doing for the children in their care. They do a tremendous amount of good work, and they are anxious that when children in their care go back into the community they really are able to go back into the community. That is one reason why children are allowed home at weekends. They must not be removed from their backgrounds for so long that they come out of school only to find the strain of going back into their homes very difficult, often leading to the commission of further


offences. Let me also say how greatly I value the work of the hard-pressed staff in local authority assessment centres who are looking after the children while they are awaiting admission to List D schools.
In relation to List D schools it would be wrong for me to hide from the House the facts about places. My right hon. Friend the Secretary of State for Scotland told my hon. Friend the Member for Glasgow, Maryhill (Mr. Craigen) on 6th May that there was a big change in the number of places available. For example, at 15th April 1971 there were 1,844 approved places in List D schools. At 31st March 1972 the number of places had dropped to 1,813. At 31st March 1973 it had dropped to 1,779, and at 31st March 1974, to 1,735. That is a net drop of 109 places over the period which I have been discussing.
The reasons for this drop are twofold. First, some List D schools have been closed or have changed their status. But the List D schools have already been doing much to change the type of accommodation which they offer. Instead of all the children living in one big dormitory, modernisations have been carried out which give some sort of privacy to the youngsters in these schools. These two things together account for the drop in the number of places.
However, the total stock of places in List D schools is being increased. The building programme in the current financial year is valued at about £600,000. Schemes already started or due to start within this year will provide about 80 extra places. The programme will also provide for improvements of other kinds. But the primary responsibility for providing new residential accommodation has been placed by Parliament on local authorities, and I am glad to say that a number of authorities have been working on plans to provide new centres both for the assessment and for the residential treatment of children. There should be about 150 additional places in assessment centres which are at present being considered or actively planned. These will go some way to relieve the existing pressure and also to provide better assessment of the needs of children coming before the hearings.
I have spoken so far about measures which inevitably take some time to implement; additional places cannot be con-

jured up overnight, especially when there is a shortage of suitable staff for this demanding work with children. At the same time, it is clear that there is an urgent need for the provision of extra residential places in the short term. Since pressure began to mount, a number of the List D schools have accepted increased numbers of pupils in an effort to help relieve the situation, but there has been no reduction in the pressure, and I am considering whether any further expansion of the schools would be possible. I also have no doubt that the local authorities could play an active part in helping to deal with the situation.
Local authorities have a good deal of other accommodation at their command —and in this context there must be taken into account the resources not only of social work departments but of other agencies. I am thinking here in particular of what education authorities and voluntary bodies may have to offer. In a situation such as we are now facing there needs to be constructive and imaginative exploitation of all the accommodation that is available. Not all children placed under residential supervision requirements by the hearings need the special education provided in List D schools. I would accordingly expect local authorities to consider whether some of their other children's homes might be used, in part at least, for children who have come before the hearings. There are at present over 5,000 residential places in children's homes in Scotland, and 16 new homes with 281 places are now under construction. I am glad that we were able to include another 27 homes with 550 places in this year's building programme. I realise that decisions to use new accommodation for children under supervision might well involve special staffing and a re-assessment of priorities by local authorities, but I suggest that such questions have to be faced at the present time.
I should not leave the House with the impression that the answer to the social problems posed by difficult children lies only in the direction of providing more and more residential places. In proportion to its population, Scotland already has about twice as many children in List D schools as there are in similar establishments south of the border. There are some grounds for thinking that the current pressure on places is partly due


to the lack of alternative forms of treatment in the community, which many panel members and social workers would like to see further developed.
My hon. Friend said that there were four approaches to dealing with people who came before the panels. One was the List D schools. The second was the assessment centre. The third was to send the person home and put him under supervision. The fourth was to send him to the police to be given a stern warning. I do not think that the position is as clear-cut as that. Between residential treatment, on the one hand, and supervision in the community, on the other, lies the whole area of what is commonly known as intermediate treatment. I have seen in Edinburgh how imagination can be used in its provision. I emphasise that there is no single pattern which can be used by every authority to deal with every kind of child. Some authorities are dealing with the problem by using volunteers to attend centres to help take children under their care.
Intermediate treatment, which is being increasingly considered as appropriate as an alternative to simple supervision by a social worker, or residential treatment, is very important. I do not think that this form of treatment is some kind of easy option or a despairing alternative to residential care; it has validity in its own right. Schemes of intermediate treatment may include direct action by social workers with groups of young people for whom such an approach seems appropriate; the mobilisation of existing youth services; the organisation of volunteers, and recreational programmes developed for specific groups. They may also involve some residential care, special day schooling, or attendance at day centres. A number of projects of this kind have already been developed by local authorities and voluntary organisations, and we shall do our best to encourage a wide extension of this kind of activity. The voluntary organisations can play an active part in this kind of thing.

Mr. Hugh D. Brown: To what extent are children's hearings making more referrals for List D

accommodation simply because there is not this intermediate area, with voluntary organisations and churches, because they are all too conscious that there is an inadequate supply of social workers to implement the provision?

Mr. Hughes: My hon. Friend has raised a very important point. With the lack of social workers, the alternative back-up, and the fact that intermediate treatment is only now beginning to be discussed with the kind of attention it deserves, has meant that the children's hearings have felt that they have only two choices—on the one hand, supervision by a social worker, which often, with the heavy case loads, meant minimal supervision and minimal contact with the social worker, and on the other residential care.
Many children's hearing panel members, directors of social work, and so on, have expressed concern at the current situation. I have recently met local authorities, the reporters, the directors of social work, and managers of List D schools—all interests concerned about the difficulties facing children's hearings and the treatment of young offenders. Although they have been concerned about the difficulty in resources, all of them have had one message to deliver. It is that despite the difficult circumstances those of us who are concerned and who feel that the Social Work (Scotland) Act 1968 is on the right lines must not lose our nerve. We should all reaffirm our commitment to the children's panel system. The punitive ethos in the treatment of young offenders will be a long time passing. It will take patience before it passes. Only with care can we solve these problems in the future.
It would be wrong to leave the matter without saying that we are dealing with the end-products of a disordered society, and the provision of social amenity is an essential part in prevention. The House may be assured that the Government will do all they can to help the local authorities and other bodies to tackle the problem.

Question put and agreed to.

Adjourned accordingly at Twelve o'clock.